
Hr5 



Book 



Coipghl N". 



COFlTiHiHT DEPOSIT. 



WHY THE CAPITALIST? 



A Refutation of the Doctrines Prevailing in 
Conventional Political Economy. 



BY 

FREDERICK HALLER 



Published by the Author 
210 Pearl St., Buffalo, N. Y. 

1914 



H'B5o\ 



Copyright, 1914 
By FREDERICK HALLER 



All Rights Reserved, Including that of Translation into 
Foreign Languages, Including Scandinavian. 



JOHN F. HIGGINS 

PRINTER AND BINDER 



S76-382 MONROE STREET 
CHICAGO. ILUINOIS 



g)aA374299 



TABLE OF CONTENTS 



Page. 

Introduction 5 

I Property 11 

II The Morgan and the Gentile 25 

III The Morgan's Reach 43 

IV Capital 50 

V Capital — The Element of Value 55 

VI Capital— What is Meant by "Used" ? 70 

VII Capital— Production 77 

VIII Capital — Produces Nothing 82 

IX The Evaluation of Capital and Rating of 

Profit 94 

X Exploitation 104 

XI Exploitation, Continued in Merchandising. 119 

XII Value, Price and Profit 137 

XIII An Analysis of Wages 147 

XIV The Measure of Wages 154 

XV The Struggle Over Wages 164 

XVI Supply and Demand 176 

XVII Money 190 

XVIII The Bank as an Agency of Exchange 204 

XIX Commercial Banking — The Exploitation of 

the Exploiter 212 

XX The Morgan's Crimp Reforms, Charity and 

Efficiency 227 

XXI The Claim that Conditions are Improving. 241 

Conclusion 261 



INTRODUCTION 



John Stuart Mill, in the preliminary remarks to his 
"Principles of Political Economy," says: 

"It often happens that the universal belief of one age of man- 
kind—a belief from which no one was, nor without an extraordinary 
effort of genius and courage, could at that time be free— becomes 
to a subsequent age so palpable an absurdity, that the only difficulty 
then is to imagine how such a thing can ever have appeared cred- 
ible." 

Turgot spoke of the art "of those who set themselves 
to darken things that are clear to the open mind." He said : 

"This art consists in never beginning at the beginning, but in 
rushing into the subject in all its compHcations, or with some fact 
that is only an exception, or some circumstance, isolated, far- 
fetched or merely collateral, which does not belong to the essence 
of the question and goes for nothing in its solution. * * * Like 
a great geometer who treating of triangles should begin with white 
triangles as most simple, in order to treat afterwards of blue 
triangles, then of red triangles, and so on." 

Add to the foregoing the thought that the writers on 
political economy, like the generality of mankind, are all 
constantly influenced by their own desire to attain pleas- 
ure and avoid pain ; in other words, are swayed by ma- 
terial interests, and we shall have all the reasons why 
political economy is still spoken of as the dismal science. 

I am actuated by the same motives that actuate the 
generality of mankind. I avow my amenability to the same 
influences. Besides all that, I claim that the experiences 
of my own life have given me an incentive to pursue an 
uncommon course of study in such an uncommon way as 
to enable me to see farther, and to distinguish more clearly 
the things that will afford me real pleasure and shield me 
from pain. Therefore this book, the purpose of which 
is to trace the sequence of cause and effect in that branch 



6 INTRODUCTION 

of Study which deals with the nature of society and its 
canons of production and distribution. 

The twenty-one chapters of argumentation following 
are devoted to an analytical discussion of the economic 
doctrines that constitute the basis of business, and cause 
the destructive conflicts and confusion now wracking human 
society. The discussion in these twenty-one chapters pro- 
ceeds from effect to cause; taking things apart, as it were, 
to examine into the nature of each part and see how all 
the parts have been put together. 

The observations made in conclusion are synthetic. The 
discussion there proceeds from cause to effect, and the 
purpose is to put accepted parts together in logical order 
and connection to see as nearly as we may the kind of 
product that will result. The many changes in human 
society that must of necessity follow from the abolition 
of individualism in the control of the resources of nature 
and the means of production are pointed out in a gen- 
eral way. 

The intricate ramifications and the many qualities and 
overlappings of interests, roles and characters, and their 
frequent commingling, blending and shading, is one of 
the principal reasons why the subject of political economy 
has been considered complex and why its serious study 
has not been made attractive by any of the many writers 
who have heretofore given the subject attention. 

In all the important divisions of present society there 
are those who severally sustain at one and the same time, 
and again at different times, widely differing roles of 
entangled, conflicting interests. These differing and con- 
flicting interests have to be disentangled and analyzed so 
as to separate the natural and inherent from the artificial 
and acquired, the true and abiding from the false and 
shifting. To trace forward these different and divergent 
lines of consideration without resulting weariness calls 



INTRODUCTION 7 

for a treatment of the whole subject matter in a manner 
not yet essayed by any other writer so far as I have been 
able to learn. 

I believe that I have met the special requirements of 
an intelligent presentation of the subject matter by means 
of the simple device of grouping the members of society 
into classes and orders, according to their natural and in- 
herent interests, as well as according to their artificial and 
acquired interests ; and by giving to each class and to each 
order a designation, a rank and a personification that iden- 
tifies it with its respective functions, influences and tenden- 
cies that have grown out of and that rest upon those sev- 
eral interests. 

The plan of the arrangement is intended to enable the 
reader to hold all the groupings in their respective classes 
and orders, and to hold apart all their respective interests, 
thereby to facilitate the operation of carrying them forward 
separately through the argument. 

The class that has dominated humanity and dictated its 
politico-economic dogmas throughout historic times is herein 
designated the "morgan." The class that has been dom- 
inated by the former and by those politico-economic dog- 
mas I have designated the "gentile." I have adopted these 
designations, not because of any claim that they are the 
best that possibly could be found, but because they are 
the best that I could find. These designations are not 
arbitrary. They recommend themselves to me because 
they each have attributes that render them appropriate. 

The word "morgan" comes to us from the age of legend. 
It was the name of a fay that was particularly adept in 
casting spells and in preparing and administering over- 
powering draughts and poisonous cups. It was also the 
name of a noisome weed that sometimes became inter- 
mingled with wholesome forage and caused serious loss 
when eaten by domestic animals. It was also at one time 



8 INTRODUCTION 

the name given to a counterfeit coin. The word has also 
been used to signify any indifferent and specious sort of 
issue, as in the phrase, "a good enough morgan till after 
election." 

I believe that these associations of thought, even if there 
w^ere no other, are sufficient to relieve me from all charge 
of having committed any violation upon language, and 
sustain me in using the substantive "morgan" in a generic 
sense to signify the spirit that subjugates by means of 
covin, chicane and violence. 

The term '"morgan" is intended to represent in this v^ork 
the class in human society that is possessed of the dis- 
cordant spirit that is always hostile to the fraternal spirit 
of gentile society; the class that interrupted the growth 
of gentile society by introducing individual prowess and 
a diverting obstruction to the peaceful evolution of the 
human race in order to establish a reign of dominering 
vainglory. 

The word "gentile" comes to us from our remote ances- 
tors who lived in a form of society based on kinship and 
the interests of kinship. The individual belonged in the 
kinship group called the gens, the several gentes were 
grouped into tribes and the tribes were grouped into na- 
tions, or confederations. Private property in the resources 
of nature or in the means of social production was un- 
known in that form of society. No individual had an 
unsocial interest. There were no interests adverse to the 
common interest of the nation, tribe and gens. 

The term "gentile" as employed in this work is intended 
to represent the masses of humanity whose true and lasting 
interests are still social and gentile; those who are de- 
prived by the state and by the law of all their portion of 
that which nature furnishes spontaneously; those who are 
deprived of all their share and portion of the vast benefits 
that flow from the accumulation and merging of the thought, 



INTRODUCTION . 9 

labor and experience of our common ancestors ; those who 
are deprived of all their share and portion of the benefits 
that flow from the natural extension of human power by 
reason of the very existence of the contemporary social 
body; and particularly who by reason of their expropria- 
tion of all the riches and benefits referred to, are com- 
pelled to buy their livelihood with their labor power, under 
terms forced upon them by the predicament in which they 
are placed, and then are despoiled of far the greater part 
of that also which is produced by their labor. 



WHY THE CAPITALIST? 



CHAPTER I. 
PROPERTY. 

Property, in the commonly accepted sense, consists 
of that which belongs exclusively and permanently to a 
person and cannot be taken from that person without his 
consent. It means full, complete and absolute title. 

Property in its essential and true nature means the 
assurance that the state will at all times exercise all of its 
power to exclude all other persons than the owner from 
all use and enjoyment of the thing of which ownership 
is claimed. It includes the full and complete right of 
the owner to consume, obliterate and to completely 
destroy. 

The right to consume, obliterate, destroy and to ex- 
clude others is the essence of all claims of ownership. 

All nature, however, denies and is constantly disput- 
ing the claim to absolute ownership of anything save 
and except one thing only, and that one thing is service. 
Despite all that man has ever done, can now do or ever 
will be able to do, nature is constantly denying, and she 
laughs to scorn, all claims and pretensions to private 
ownership excepting only in the one thing stated, name- 
ly, service. In all the rest of man's proudly asserted 
wealth in material things, nature vouchsafes to him only 
a usufruct. His ownership of service, however, when 
acquired, is complete. He uses it and in using it con- 
sumes the right, leaving not the slightest remnant or 
vestige. 

Not so as to his other claimed ownership. His title 

11 



12 WHY THE CAPITALIST? 

to land and chattels which nature allows, does not differ 
in the slightest degree, in principle, from the title he 
has in a lung full of air. The only difference is that he 
asserts dominion over one a little longer than over the 
other. Every molecule of air that he inhales is hardly 
within his lungs but it immediately turns upon its heels 
and rushes out again. He could not hold it in absolute 
ownership if he would, and w^ould not if he could. The 
water he drinks he holds but a little while longer than 
the air he breathes, the food he eats yet a little longer, 
the nutriment his system extracts from the food a little 
longer still. The clothes he wears, his gold, his auto- 
mobile, his house, all obey the inexorable law, whether 
he wishes it or not, consents or protests. 

Man does not and cannot exercise complete dominion 
over the slightest particle of matter. Do what they like, 
all mankind by their united efforts could not obliterate, 
render into nothing, a single acorn. Every atom of that 
acorn has existed throughout the eternal past. It is 
destined to continue in never ending transmutations, 
and will continue to exist throughout the eternity of 
the future. Who can doubt that each of these atoms 
will enter into every form of existence and in due course 
again enter into the formation of other acorns countless 
millions of times? Where th>en is the basis of man's 
assertion of ownership of material things? All that he 
has is a usufruct. He has nothing more than the right 
to use for his own maintenance and present life and so 
far as his maintenance and life is to be subserved, he can 
rightfully exclude all others for the time being from the 
material things he is using. There is but one thing ac- 
quired by him that he completely uses up, consumes. 
Service is the only thing that under nature's laws he can 
assert complete ownership or dominion over. 

Man's mind is over-powered by a simple phenomenon 



PROPERTY 13 

of nature. His needs give to him temporary dominion 
over so much of matter and of nature's forces as are re- 
quired to satisfy the requirements of his life. From this 
he assumes, erroneously, a perpetuity of ownership and 
dominion vested in himself and extends that ownership 
and dominion over everything and over so much of 
everything that he can exclude others from. He falls 
into the way of thinking that as a matter of course, all 
that is necessary to give absolute ownership is to exer- 
cise against others the physical power of exclusion. 

If a morgan had power to exclude the rest of man- 
kind from the Atlantic Ocean, or from Lake Erie by vir- 
tue of the size and reach of his bludgeon, or by virtue 
of the power of state arrayed on his side, then this mor- 
gan would also actually believe that he alone owned the 
ocean, or the lake, and everything contained in the lake. 
The extent of his ratiocination would be that his power 
to club off all other men, or have the state to club them 
off for him, gave to him the right of absolute ownership 
over everything coming within the reach of such power. 
He plants himself upon this to him sufficient right of 
property and promulgates and has others, parading as 
censors of morals and sage counselors, to preach and 
teach into the minds of the excluded humanity a special 
system of morals and learning on the rights of property. 

These censors and sages have given together a veri- 
table Augean stable of theology and jurisprudence. All 
is designed to cover up and carefully conceal the cardinal 
fact that the claim of perpetual ownership in material 
things rests entirely upon the power to exclude. The 
mass of humanity has been kept so busy quarreling about 
inconsequential things that they have had no time left to 
inquire into the basis of the claim of property so success- 
fully asserted by the real trouble makers, past and 
present. 



14 WHY THE CAPITALIST? 

Some of the conventional economists use the term 
''free goods of nature" as applied to air, water, sunheat, 
sunshine and such other things as the morgan has not 
yet been able to exclude us from. They concede that 
these "free goods of nature" cannot be property, but say 
that none of the other needful things furnished by nature 
are "free goods" because they can be and have been ap- 
propriated by individuals. For instance, the atmospheric 
air that we breathe consists of about 76.7 per cent nitro- 
gen and 23.2 per cent oxygen and 0.1 per cent carbonic 
acid gas, besides the watery vapor. Nitrogen therefore 
exists in illimitable quantities in the atmosphere about 
the earth. Nitrogen also enters largely into the food- 
stuffs, containing albumen and fibrine such as meat, fish, 
eggs, milk, beans, peas and many other foods produced 
by nature in her laboratory. You could not have beans, 
or any of the other things mentioned, if there were not 
any nitrogen about. Nitrogen when taken into our lungs 
as an ingredient of the air we breathe is conceded to be 
one of the "free goods" of nature because no morgan is 
yet able to expropriate us of it in that form; but when 
this nitrogen is in the beans we eat, even aside from the 
value created and imparted to the bean by labor, it is 
not at all regarded as one of the "free goods" of nature, 
because the morgan has been able to expropriate us of it 
in this form. That is all the difference. If you take 
nitrogen into your lungs as a dilutor of the oxygen, it is 
free. If you want to take it into your stomach for nour- 
ishmen, it is not free, but is private property, and you 
will have to make yourself a slave of the morgan to get 
a little of it for nourishment. 

Those of us living in northern latitudes know the dif- 
ference between paying for coal during the winter time 
to keep warm, and being kept warm in the summer by 
the heat we get directly from the sun. Coal in the earth 



PROPERTY 15 

is one of the free goods of nature the same as the sun's 
heat. In fact coal is sun-heat stored up by nature. Yet 
when we want coal we have to pay for the digging of the 
coal and bringing it to us, and we are also compelled to 
pay the morgan owner of the mine for the coal itself. 
That gentleman "owns" the mine and his state backs 
him up in his ownership. We might well be thankful 
every day of our lives that no one has yet found a way 
for the morgan to gather up from day to day all of the 
sun's hieat and store it for the glorious advancement of 
trade and commerce. Just think how delightful it would 
be to have bills for sun heat staring us in the face all the 
year round! 

How fortunate we are that the morgan has not the 
power to turn a switch and shut off the heat or the light 
of the sun, or to cut off our respective supplies of the 
earth's power of gravitation, that power by which every- 
one is held on to the ball ! Just think of the revenue the 
morgan would be getting by ''supplying" us with these 
essentials of life by letting us have them at fixed rates. 
He already has seized a small part of the power con- 
tained in the earth's pull of gravitation, and reaps quite a 
revenue from it by "supplying" us with electricity gen- 
erated at numerous water falls. But to cut off our sup- 
ply of the power that old mother earth furnishes and 
that we get through a wire under present methods, will 
seem crude indeed if the morgan ever finds a way to 
sever the cord of individual gravitation so that he can 
send anyone of us flying off into space, have the earth 
drop us off, should we find it inconvenient to pay him his 
bill for "supplying" us with gravitation. Such a sum- 
mary proceeding would make an Irish landlord green 
with envy. It makes one dizzy to think of the addi- 
tional billions of wealth that we shall have as a result of 
this most wonderful achievement of civilization, when a 



16 WHY THE CAPITALIST? 

morgan "supplies" every man, woman and baby with 
the gravitation to hold on to the earth with, at so much 
per kilowatt. 

There are three fallacies or illicit conclusions in the 
reasoning on which the claim of complete and absolute 
title to private property in things is based. The first is 
as to the duration of the title, the second is as to the 
extent of the right claimed under the title, and the third 
is as to the volume of the thing to which title is asserted. 

As to the first of these fallacies relating to duration 
of title : Property is based upon the claim to a perpetual 
and never ending ownership, an ownership to continue 
on by proxy after one owner has ceased using or need- 
ing; and under it he assumes to dictate who shall be the 
proxy in excluding others from the use of the earth. For 
instance, A is upon the public street. He has a qualified 
property right in the spot where he stands. So long as 
he is there he excludes all other persons from the par- 
ticular spot occupied by him. If, when A has no longer 
any use or need of the spot he is occupying he should 
insist upon the right to exclude everybody else from oc- 
cupying or using that particular spot save upon payment 
of ground rent to him for the privilege, we should have 
a simple example of the first of the three fallacies, 
namely, the assertion of a perpetual title. 

If A, having no further personal use for, or need of 
the part of the street that he last occupied, should insist 
on holding on to it by standing continuously on the spot 
night and day, or by planting a post in the ground there, 
taking up the space, or by placing a heavy barrel or 
package upon the spot so that no one else could use it, 
we should have an examfple of the second fallacy,, 
namely, as to the extent of the right of user under title 
to the property. Here would be the assertion of com- 
plete control and dominion over all the rest of mankind, 



PROPERTY 17 

not only as to that spot of earth and the exclusion of 
them from the use of it, but also to the assertion of a 
right to a different use than that of standing there per- 
sonally or passing and repassing; including the right to 
obstruct and impair to an extent the usefulness of the 
surrounding surface. We should there have a simple 
illustration of the second fallacy, namely, that his right 
of property was absolute and unlimited. 

If A, because he was passing or had passed along a 
street, should thereafter insist in excluding everybody 
else from the whole of that street and had the physical 
power to exclude them, we should have an example of 
the third kind of fallacy, namely, as to the volume of the 
thing covered by the claim of title and property. We 
should have a man claiming the right to exclude every- 
body from the whole of a thing because he was right- 
fully having or had rightfully had for a short time the 
use of a small portion of it for certain purposes only. 

Or to take another illustration. If A had a ticket to a 
theater for one performance at which no seats were re- 
served by the box office, and then by virtue of that 
ticket, as soon as he got in, he asserted the right to ex- 
clude everybody else from a whole section of say a 
hundred seats, not only for that night but for all suc- 
ceeding nights, save as he would rent to them, sell to 
them or will to them the right to occupy, and should also 
insist upon putting kegs or heavy boxes upon as many 
seats as he chose, then we should also have an example 
of all three of the fallacies, namely, as to duration of 
title, as to right of user under the title claimed, and as 
to the volume of the thing to which title is claimed. 

If A should in any of the examples stated enforce his 
claims and pretensions by virtue of his own strong arm 
or with the assistance of friends or retainers, he would 
be holding his so-called property only by virtue of his 



18 WHY THE CAPITALIST? 

own physical prowess, and would hold it only so long 
as he would be able to beat off all other strong men. 

But assume that in order to prevent himself from be- 
ing disturbed in his possession by any superior force, A 
gets the sovereign power of the state to sanction and 
support his claim. Then everyone daring to disregard 
any of A's claims of private ownership, and seeking to 
make use of the street or the seats in the theatre that A 
cannot use and does not need himself, will be a rebel. 
The state will dispatch the police, the sheriff's officers, 
and the soldiers to beat the rebels off. This would be 
the exercise of the war power to sustain and uphold this 
institution of property. 

William Blackstone, the greatest of all the spokesmen 
and apologists of English common law, was unable to 
find anything else than force to sustain the right of 
property. He said: 

"There is nothing which so generously strikes the imagination 
and engages the affections of mankind as the right of property; 
of the sole and despotic dominion which one man claims and exer- 
cises over the external things of the world, in total exclusion of 
the right of any other individual in the universe, and yet there 
are very few that will give themselves the trouble to consider the 
original and foundation of this right. 

Pleased as we are with the possession, we seem afraid to look 
back to the means by which it was acquired, as if fearful of some 
defect in our title; or, at best we rest satisfied with the decision 
of the laws in our favor without examining the reason or author- 
ity upon which those laws have been built. 

We think it enough that our title is derived by the grant of 
the former proprietor, by descent from our ancestors, or by the 
last will and testament of the dying owner; not caring to reflect 
that, accurately and strictly speaking, there is no foundation in 
nature or in natural law why a set of words upon parchment should 
convey the dominion of land; why the son should have the right 
to exclude his fellow creatures from a determined spot of ground 
because his father had done so before him; or why the occupier 
of a particular field or of a jewel, when lying on his death bed 



PROPERTY 19 

and no longer able to maintain possession, should be entitled to 
tell the rest of the world which of them should enjoy it after him. 
These inquiries, it must be owned, would be useless and even 
troublesome in common life. It is well if the mass of mankind 
will obey the laws when made, without scrutinizing too nicely 
into the reasons of making them. But when a law is to be con- 
sidered not only as a matter of practice, but also as a rational 
science, it cannot be improper or useless to examine more deeply 
the rudiments and grounds of these positive constitutions of so- 
ciety." 

James Kent, the Almerican apologist and commenta- 
tor on the law said: 

"It is a fundamental principle in the English law, that the king 
was the original proprietor, or lord paramount of all the land in 
the kingdom, and the true and only source of title. In this coun- 
try we have adopted the same principle, and applied it to our 
republican governments; and it is a settled and fundamental doc- 
trine with us, that all valid individual title to land within the 
United States is derived from the grant of our own local gov- 
ernments, or from that of the United States, or from the crown, 
or royal, chartered governments established here prior to the Rev- 
olution." 

As bearing upon the right of private property, it will 
be interesting to quote from an opinion of the New York 
Court of Appeals, in a recent decision. That court says : 

"The right to make a testamentary disposition of or the right 
to inherit property is not an inherent right; nor is it guaranteed 
by the fundamental law. Its exercise to any extent depends entirely 
upon the consent of the legislature as expressed in their enact- 
ments. It can withhold or grant the right, and if it grants it, it 
may make its exercise and its extent subject to such burdens and 
requirements as it pleases. Wherein the legislature is silent in 
the matter of the devolution of property, the courts cannot speak, 
and as it has spoken, the courts must obey and enforce." 

(Matter of White, 208 N. Y. 64-67.) 

No better or more rational basis for private, absolute 
ownership has ever been given than those given by 
Blackstone and Kent. Expediency has been the only 



20 WHY THE CAPITALIST? 

argument ever urged by them in support of the institu- 
tion of property. 

Expediency is always an artificial means of escape 
from difficulty and embarrassment. It is always based 
upon the plea of necessity. The plea of necessity will, 
however, no longer do. 

The individual enjoyment of the bounties of nature 
does not necessitate impossible perpetual individual own- 
ership of them. The air taken into my lungs, is in my 
exclusive possession and use during a short period of 
time. Very soon it leaves my possession, under nature's 
process becomes cleansed, fit and wholesome again, and 
enters the lungs of others to perform a like service. The 
same is true of the water that I drink, of the food I eat 
and of everything else material that I use. Everything 
comes from the great melting pot and in due course re- 
turns to the melting pot again. Would anyone say that 
in order that I may fill my lungs with air as often as 
necessary to maintain health that I must have title in 
fee simple absolute to a hundred cubic acres or cubic 
miles of the atmosphere, or that because my system 
craves fresh water I must have a fee simple absolute of 
a like quantity of a lake or of a rain cloud. 

If a morgan could ever have gotten any scheme by 
which he could have excluded the rest of mankind from 
getting lungs full of air, he would certainly have availed 
himself of that means also of making money. The same 
is true as to water. If it were not for periodfcal rain- 
falls, and if water were only to be had from certain 
places, i. e., lakes and ponds, like deposits of coal, it 
would in all probability be impossible for the rest of us 
to obtain a drop of water to drink without paying tribute 
to a morgan, as it is impossible now to obtain a pound 
of coal without paying tribute to the morgan that stands, 
club in hand, over the coal in the earth; 



PROPERTY 2i 

The proposition that one should be compelled to pay 
some morgan for the air he breathes, or for the water 
that he drinks, seems absurd. It is absurd for the reason 
only that our minds are, with reference to air and water, 
in a more healthful and natural condition than with ref- 
erence to many other things that are equally the free 
goods of nature. So effective is the power of suggestion 
on the human mind that if the morgans, assisted by the 
persistent driving and hammering of priests, preachers, 
writers, courts, politicians, policemen and soldiers, had 
impressed upon the minds of past generations of human- 
ity the sacredness of private property in air and water, as 
they did as to other things that all nature equally denies 
property in, then we should today also be sending 
wretches to prison, if possible, for stealing the morgan's 
air by breathing it and for stealing his water by drinking 
it without paying the price. 

Breathing the air and drinking the water is no different 
in principle from standing or lyng upon the earth or tak- 
ing coal out of the ground. Yet we cannot do either of 
the latter without permission from or paying tribute to 
some morgan. 

The argument of necessity of ownership of the earth 
is stretched to the cracking point. It asserts that we 
cannot inhabit the earth unless we have private owner- 
ship of the earth. It prophesies that inevitable confusion 
and never-ending controversy would result, that each one 
would fight to occupy the most desirable places on the 
surface of the earth. The difference in desirability of 
dwelling places is very much exaggerated. The actual 
natural differences in desirability can with comparatively 
little effort on the part of the state be almost wholly 
eliminated. The actual and practical differences now 
existing are artificial. They are unnecessary. They have 
been produced and are maintained by morgans, actuated 



22 WHY THE CAPITALIST? 

by a never-to-be-satisfied greed for gain and craving for 
domination. As to the exceptional spots of beauty, 
along the streams, beside the lakes, overlooking water 
falls, mountain scenes, or sea shores, that once were all 
held as private property by morgans, and some that are 
still so held, we have long since come to understand and 
are more and more realizing that these are not for the 
exclusive use of any individual, but are to be used by 
all mankind as public parks and pleasure grounds. There 
does not appear even now, with the small number of such 
public parks, to be any disposition on the part of human- 
ity to indulge in any brawls or controversies about the 
enjoyment of these beauty spots as parks. Their use in 
common at present as public domain does not present 
any difficult problems whatsoever. 

With the beauty spots used in common as public 
parks, and with the hideous features created by morgans, 
such as crowded and narrow streets and alleys and un- 
sightly mills in the wrong places, eliminated, the re- 
mainder of the earth will afford in abundance dwelling 
places of practically equal desirability for all mankind. 
There is plenty of room for each one to have a large 
corner lot on a broad avenue. The inherent differences 
in the desirability of dwelling places is scarcely, if any, 
greater than the differences in the air we breathe or the 
water we drink. Mountain air, sea air, mountain water 
and water of the plains and low lands, with all their 
gradations present fully as many differences, yet we 
do not find any controversy over these, on which to pred- 
icate an argument for private ownership. 

What has been said of the beauty spots on the sur- 
face of the earth might with equal force be said of the 
moveable articles of rare beauty and attraction. These 
things, however, when they do not constitute the means 
of production, have little bearing on the economic con- 



PROPERTY 23 

ditions and problems of society. The exclusive posses- 
sion of them does not interfere appreciably with the get- 
ting of a livelihood by the mass of mankind. It might 
however, be said in passing that rare gems, works of art 
and curios are gradually finding their way into public 
museums where the people may see them and enjoy 
them. After all, that is the real enjoyment they afford, 
even to the owner, outside of the pleasure he may find in 
calling himself the proprietor. The asserted ownership 
of land carries with it the control of natural resources 
and has far reaching consequences. 

The stock argument that in this country there is 
plenty of land, and the *'go west, young man" advice 
does not meet the situation, or affect the principle in- 
volved. It concedes the argument and seeks to postpone 
the consideration. The time for that has, however, long 
since past. Furthermore, a very small percentage of man- 
kind is physically or otherwise able, or equipped or in- 
clined to embark on pioneering enterprises. The great 
majority of civilized people have by reason of heredity, 
environment, training, education, mode of life and tem- 
perament been rendered much more capable and useful 
in other walks of life, and have at the same time to the 
same extent been rendered unfit to engage in, or to under- 
take, the perils of a pioneer life. 

Those who assert a private ownership of the things 
which in their very nature cannot be property are, and 
always have been, the plague and scourge of the human 
race. This is not intended to be an expression of hatred. 
It is only a statement of fact deduced from history. It 
is puerile to hate anything. It is unnecessary to classify 
the expropriators among either the good or the evil 
things. The many pests and misfortunes that sorely 
afflicted the lives of our ancestors might very well be 
regarded as having been necessary for the progress and 



24: WHY THE CAPITALIST? 

development of the human race. Had it not been for 
smallpox, yellow fever, diphtheria and other like dis- 
eases, we should have learned very little about our own 
bodies. Throughout the past down to comparatively 
recent times these ailments were beyond the power of 
man to understand, much less to master. Many regarded 
them as being inherent in human nature, others regarded 
them as being visitations of divine punishment for per- 
sistent sinfulness. The scientific mind, however, per- 
sisted in its work of investigating, analyzing, synthesiz- 
ing and experimenting to relieve the race of man from 
these sore afflictions. The cry of *Tt cannot be done" 
constantly resounded in the ears of these brave and pa- 
tient men. Yet is was and is being done. 

Lewis H. Morgan in his invaluable work. Ancient So- 
ciety, says: 

"Since the advent of civilization, the outgrowth of property 
has been so immense, its forms so diversified, its uses so expand- 
ing and its management so intelligent in the interest of its owners 
that it has become, on the part of the people, an unmanageable power. 
The human mind stands bewildered in the presence of its own 
creation. The time will come, nevertheless, when human intelli- 
gence will rise to the mastery over property, and define the relations 
of the state to the property it protects, as well as the obligations 
and the limits of the rights of its owners. The interests of so- 
ciety are paramount to individual interests, and the two must be 
brought into just and harmonious relations. A mere property 
career is not the final destiny of mankind, if progress is to be the 
law of the future as it has been of the past. The time which has 
passed away since civilization began is but a fragment of the past 
duration of man's existence and but a fragment of the ages yet 
to come. The dissolution of society bids fair to become the ter- 
mination of a career of which property is the end and aim, be- 
cause such a career contains the elements of self-destruction. 
Democracy in government, brotherhood in society, equality in 
rights and privileges, and universal education, foreshadow the next 
higher plane of society to which experience, intelligence and knowl- 
edge are steadily tending. It will be a revival, in a higher form, 
of the liberty, equality and fraternity of the ancient gentes." 



CHAPTER II. 
THE MORGAN AND THE GENTILE. 

There was a time when our ancestors did not know of 
private ownership of any of the forces or things supplied 
by nature. Society was, of course, differently consti- 
tuted then. This subject has furnished a rich literature 
and promises much mpre. It is not necessary for my 
purpose to go into it any further than to say that our 
ancestors were freemen of equal endowment before there 
were either chattel slaves or masters, serfs or barons, 
wage workers or capitalists. All had equal access and 
right of access to the resources of nature. No state in- 
terposed its strong arm to maintain any one in ex- 
clusive ownership, or to exclude the rest of mankind 
from equal participation. The form of society of those 
days is known as the gentile form, and our ancestors of 
those days were then known as gentiles. The society of 
those days formed about the interests of kinship, center- 
ing in the gens or family. 

The breaking up of gentile society came with the 
coming of the private owner and his exclusive owner- 
ship of nature, and the things of nature so far as physi- 
cal force could support and maintain the claim of such 
exclusive ownership, and bludgeon the rest of mankind 
into a recognition thereof. It is not in the least neces- 
sary to indulge in any discussion as to whether it was 
right or wrong. This is not a work on casuistry. It 
were equally bootless to argue as to whether such was 
a necessary course of human progress or not. 

Clear understanding will be much promoted if we 
keep in mind that the expropriated gentile continued 

25 



26 WHY THE CAPITALIST? 

to be and still is the expropriated gentile. His expro- 
priator has appeared in many guises and forms, as mon- 
arch, as feudal lord, as slave owner, as landlord, as cap- 
italist, as lord and master over all nature so far as force 
can exclude the gentile from the resources of nature. 
Then, by means of the advantage the expropriator gained 
through his overlordship, he also became exploiter co- 
ercing gentiles to work and produce profits — surplus 
value — all of which he also seizes. Sometimes he is 
more expropriator, levying tribute, sometimes he is more 
exploiter, pretending to buy labor — labor power — and 
taking profit from the application of that labor power to 
productive work. Sometimes he is monarch, sometimes 
feudal lord, sometimes land owner, sometimes magnate, 
sometimes stockholder, sometimes bond holder. Some- 
times he is the votary of war, sometimes he masquer- 
ader as the votary of peace. Sometimes he is brutally 
frank and direct, sometimes, and more often, he is hypo- 
critical, insinuating and indirect. But he has always one 
aim, one purpose, one object, and that is to drag to him- 
self the lion's share, to rule, to dictate to the gentiles 
the lives they shall live and the extent to which they 
might live their lives. His rapacity far exceeds his ca- 
pacity and its only limit is in its own nature. Profit 
from the labor of gentiles can only be realized as long as 
the gentile can labor, and to labor he must have enough 
to live according to his station in life, reproduce his kind, 
and generate labor power. This then is the amount which 
in the very nature of things needs must be allowed the 
producing gentile. This is the natural limit of exploita- 
tion. 

All of the many guises and forms of the expropriator 
and exploiter present seemingly different characters, but 
these differences are only seeming, only skin deep, and 
only deceptive, like the different colors of the chameleon. 



THE MORGAN AND THE GENTILE 211 

There is one essential of character that determines his 
place and office. 

I desire a word to serve as a generic name of this 
character. The advantages that will result from such a 
generalization will be obvious. I shall therefore desig- 
nate this character of characters as the morgan, and will 
keep him where he belongs in a class all by himself, he 
having segregated himself. This generic name is not 
used in disrespect but entirely as a uniform designation 
for description. 

The gentiles constitute one class, namely the class of 
the expropriated. This class has, however, been driven 
into different divisions again by the artificial conditions 
forced upon them by the morgan's institution of private 
property. These different orders of the same class have 
also been arrayed against each other, some more, some 
less, in an artificially created antagonism that constantly 
redounds to the benefit of the morgan, and produces the 
strongest sort of a prop and support for his institutions. 

As all gentiles have been expropriated of their free 
and equal right to share in and have access to the re- 
sources of nature, their interest in this respect is com- 
mon, and when understood will be controlling. Under 
the resulting forms and conditions of society, from the 
earliest to the form now prevailing, other generated in- 
terests, based in part upon needs growing out of the 
situation and in part upon lack of understanding, di- 
vided and still divides the gentiles into these different 
orders. These respective interests of the different orders 
of the gentile class were and are seemingly, but only 
seemingly, stronger than their indicated common primary 
class interest. 

The class of society which we shall know as the gen- 
tiles separates itself into three orders based upon their 
respective secondary economic interests. The lines of 



28 WHY THE CAPITALIST? 

demarcation are not always sharply defined or straight. 
They are very often vague and wavering, and there is a 
frequent overlapping. The ingredients of a cake run 
into and impart their flavor to each other. Still our 
palates can differentiate between the taste of the citron 
and the sugar and the butter and the eggs. And if the 
cake should be spoilt by rancid butter or a bad egg the 
discriminating palate can soon tell the cause of the 
trouble. 

The first of the gentile orders consists of those gentiles 
who bow their necks to the morgan's yoke to obtain 
their livelihood by that labor which affords either profits 
or personal service to the morgan. These, besides being 
expropriated of their heritage in nature's bounty, and 
therefore having in common with other gentiles a pri- 
mary interest hostile to that of the morgan, are now also 
exploited of all that they produce by their labor save 
only so much as they must have from nature and the 
product of their work to live upon, to reproduce their 
kind, and to generate more labor power for the produc- 
tion of more value. Here then is a secondary economic 
interest equally as hostile as the primary and irrecon- 
cilable with the interests of the morgan. Those gentiles 
who become personal servants and menials of the mor- 
gan produce no value by their labor. They represent 
part of the overplus of workers that are excluded from 
commodity producing work. There is nothing in the oc- 
cupation or in the interest of either of these seeming 
two kinds of workers that can make them otherwise 
than of one order, with interests alike loyal to the cause 
of the gentiles and hostile to the morgan and his insti- 
tutions. There is a solidarity of interests, though the 
work of one is solely to produce profits and that of the 
other is not to produce any profit or any value, except 
occasionally and incidentally. They belong to one class 



THE MORGAN AND THE GENTILE 29 

and in one order. They are the wage workers and their 
secondary economic interests are common. I shall refer 
to them as gentiles of the first order. 

The second order of gentiles are those that are not 
wage workers. They include what might be called the 
adventurers or free lances, making their livelihood by 
their wits, their talent, or by successful infractions of the 
law or the conventional rules and precepts, or by a num- 
ber of these methods, criminals, prostitutes and unem- 
ployed. This order also includes those who are not 
wholly and completely expropriated, but have yet hold 
and control of some small part of nature's resources and 
means of production ; such as small farmers, small man- 
ufacturers, small merchants and tbe like; that body of 
gentiles still who are not possessed of enough to enable 
them to live upon the labor of others, but who have 
enough partly to offset in more or less degree the disad- 
vantages of their expropriation by the morgan, and to 
help them, so to speak, to get somewhat better returns 
from their own labor. The effect of their expropriation 
by the morgan is not so complete and therefore they 
also escape exploitation in about the same measure. 
Their position as an order is constantly being assailed 
by the morgan. His forces are continually pressing 
them toward the gentiles of the first order, driving them 
into the ranks of the wage workers. The problem of the 
gentiles of the second order is always to know how to 
escape such a fate. 

The third order of gentiles are comparable to the mer- 
cenary soldier fighting on tbe side of a usurper and 
against his own people. They constitute the morgan's 
physical and intellectual police. 

The morgan, however, is always in one class by him- 
self. Whether monarch, baron, landlord, merchant, mine 
owner, railroad owner, banker, factory owner, farm 



3U WHY THE CAPITALIST ? 

owner, or what not. He is always and all the time ex- 
propriator and exploiter. These two phases of the mor- 
gan's operations must, however, be kept clearly separ- 
ated. As expropriator the morgan excludes the gentiles 
from partaking of the free goods that nature has pro- 
vided. He claims exclusive ownership of all the free 
goods. This gives him the power to impose terms of life 
upon the gentiles. The morgan's terms are that besides 
tax or tribute or rent he be given personal service or 
profits in such manner and form and in such measure 
as his fancy dictates. This profit aside from what na- 
ture gives us, comes and only can come from values 
produced by the expenditure of labor power, and is 
measured in amount by th»e difference between the 
amount that the working gentile and nature produces 
and the amount of the actual necessaries of life required 
by the producing gentile that he may produce and ex- 
pend labor power and propagate. 

The morgan decrees that so many of the gentiles as 
he finds can be advantageously employed under his 
methods be kept busy at value producing work, supple- 
menting nature in producing and augmenting the supply 
of the material necessaries of life. Without scientific 
basis or estimate as to quantities required, the gentiles 
so employed are driven to produce and do produce, in 
rough measure, by adding to what nature volunteers, so 
much as the maintenance of human life and the morgan- 
dominated society requires. The relative number of the 
gentiles who are workers so employed at established oc- 
cupations, as compared with the rest of the gentiles and 
as compared with the amount produced is constantly 
growing smaller. This is owing to improved methods 
of production evolved and applied by the intelligence of 
the gentiles themselves, and owing to the invention also 
by the gentiles oi machinery that multiplies many times 



THE MORGAN AND THE GENTILE 31 

the volume of production, all reducing the proportionate 
number of the gentiles needed at productive work. The 
morgan benignly welcomes and accepts all these im- 
provements and permits them to be applied as fast as he 
can see that his interests as a morgan are advanced 
thereby. His interests are always advanced by the pro- 
duction of the largest possible volume with the least pos- 
sible number of workers. This leaves him the largest 
amount of surplus after the workers get the portion 
necessary for their keep. 

The morgan consumes an enormous amount of the 
surplus, for he and his horde feed and squander pro- 
digiously. He gets yachts, limousines, palaces, country 
seats, hunting parks, etc., etc. The important thing to 
the morgan is then to exchange the still remaining sur- 
plus in such manner as to be to his greatest advantage 
in extending his power and sphere of influence still fur- 
ther. The only person with whom the morgan can ex- 
change the residue of these products, ultimately, are gen- 
tiles. For these constitute the remaining great body of con- 
sumers. 

The gentiles not employed for wages either in value 
producing work or in work of personal service or attend- 
ance and therefore not also exploited as wage workers, I 
designate herein as gentiles of the second order. 

The number of these gentiles of the second order is 
large and ever growing relatively larger. Their rapid 
growth results from improvements in the methods and 
machinery of productive industry. Many of the gentiles 
of the first order are taken up in the production of pure 
luxuries for the morgan, others in occupations that have 
only one purpose and that is to produce further means, 
conditions and circumstances to continue the morgan in 
power. With all of the gentiles of the second order the 
aim and end is not to produce any real values, but to get 



32 WHY THE CAPITALIST? 

something that will enable them by hook or by crook to 
squeeze in and get a fresh hold by which to hang on to 
life. Yet, and in spite of everything, this ever grovvring 
army is constantly pressing in every direction for place 
and opportunity and is constantly growing both in num- 
ber and importance. A large proportion of its members 
is always fluctuating back and forth from and to the other 
orders, particularly from and to the wage working order, 
the gentiles of the first order. It is historically a revolu- 
itonary order and contains within it now most potent 
germs of hostility to the morgan. 

The gentiles of this second order may be called ad- 
venturers, innovators, also the loose and vicious, all im- 
patient of restraint or privation. Whatever their out- 
ward show or mien, they have no respect for the mor- 
gan's law, or his theological or moral precepts. They 
have an unconquerable aversion to the wearing of the 
morgan's yoke, in fact their aversion to that is so great 
that they avoid as much as they can all of the occupa- 
tions of the wage worker. The lives of all the gentiles 
in this order whether they will or no, or are conscious 
of it or not, might be said to be one continuous active 
protest. This order embraces the violators of the laws 
relating to property, the gamblers, the speculators, the 
prostitutes, the hucksters, the brokers, the promoters, 
the doctors of medicine, the artists not yet wage work- 
ers, lawyers, some teachers and some authors. 

Turpitude, of course, does not come into consideration 
in making this classification. Those in this second order 
do not as a rule come necessarily under the mental or 
■'moral" sway that works for the perpetuation of the 
morgan's power. Their only interest in the present 
state, its laws, its ethics, its commandments, its morals 
or religion is to avail themselves of any advantages by 
which they might slip into easier situations and to avoid 



THE MORGAN AND THE GENTILE 33 

any adverse effect upon themselves. They give outward 
obedience, often ostentatiously, so far as they find it 
necessary or profitable. Though they would also ex- 
propriate and exploit, and some of them do, the return 
they get is not clear profit. It is intermingled with the 
product of the expenditure of their own labor power, 
and often not amounting to as much in volume as their 
just share of what nature yields, plus their own added 
labor. And of that which passes to them, a relatively 
small portion remains with them. A great part of it 
passes through their hands as grain passes through the 
hopper of a mill and goes on further to heap up the 
measure of the morgan. Masked and devious though the 
process may be, yet nevertheless and notwithstanding, 
is it true that there are those of the second class of gen- 
tiles who can truthfully say that their talent, education, 
experience, personal attention and industry outside of 
their natural right to share in nature's bounties, consti- 
tutes a legitimate and adequate consideration for what 
they have of life, after they in their turn have had the 
juice of taxes, tribute and pure profits squeezed out of 
them by the mill of business that finally transmits to the 
morgan all that is transmittable. Yet these gentiles are 
forced to parade in contaminated plumes. They are not 
permitted even the good name of receiving their earned 
portions as compensation. They are compelled to take 
their compensation under the smirching name of profits. 
The line of demarcation between the compensation and 
the pure profits that these gentiles of the second order 
get is vague and wavering because no measure and no 
figures are available. But this is sure, that the amount 
produced per person engaged in productive industry is 
constantly increasing. Therefore the opportunities to 
engage in productive industry are constantly decreas- 
ing. Another thing is sure and that is that the demands 



34 WHY THE CAPITALIST ? 

of the Morgan upon the gentiles of the second order ex- 
erted by the invisible and irresistable pull of the ma- 
chinery of business, are and for a long time have been, 
and in the very nature of things will continue to be grow- 
ing more and more exacting; and that as to these gentiles 
of the second order, the prospects for pure profits are 
fast vanishing. Not only have their chances for climbing 
into the morgan class been growing slimmer all the 
time, but the pressure the other way is constantly grow- 
ing greater and it is only a question of time when they 
will all be driven to the wage working order among the 
gentiles of the first order, there to find that no more 
hands are wanted because those already employed are 
able with the machinery and modern methods to pro- 
duce all and more than all that is required. Many art- 
ists and many members of the professions, lawyers, doc- 
tors, engineers, are already there, and the stream of 
those on the way is constantly growing in volume. 

The greatest flux and mutation is found in this second 
order of gentiles, embracing as it does the adventurers 
and free lances. They and the wage slaves have, how- 
ever, a solidarity of interests. They are both despoiled, 
expropriated, by the morgan of their heritage in nature's 
resources. Neither of them are necessarily or by their 
station in life tied up to mentally or morally support 
the morgan's system of state, laws or religious com- 
mandments. Their primary economic interests as gentiles 
are common as against the morgan. It is with them only 
a matter of education and consciousness. The only un- 
likeness between them is that the wage worker is also 
exploited as a wage worker, and the gentile of the sec- 
ond order is not. 

The third great division or order of the gentiles con- 
stitutes the mercenary forces of the morgan to keep him- 
self on his throne and the gentiles in subjection. They 



THE MORGAN AND THE GENTILE 35 

furnish the craft and cunning, likewise the physical force 
to keep up and support the morgan's estate. The first 
of these in importance at present is the law pack. They 
are the law makers, the legislators, the judges, the law- 
yers, the detectives, the sheriffs, the police, the military. 
These devote their lives and energies to serving the 
morgan in keeping up his estate, most of them believ- 
ing in a beclouded sort of a way — for they are not clear 
on anything — that it is the gentile's state, and that the 
gentile's interests and the morgan's interests are identi- 
cal in the maintenance of this state. The law makers — 
1 mean here the legislators, the judges and the lawyers — 
in the main echo only the laws that are dictated by the 
morgan; if not by him personally, then, by his inter- 
ests, whether visible or invisible. The tardy and halting 
labor laws of the last few decades or so, have only been 
so many sops thrown to a snarling cerberus. 

The state as at present constituted has but one aim 
and purpose and that to make secure the morgan. That 
purpose is subserved in an immeasurable degree by the 
show of legality and hollow pretense of right, given 
to the morgan's possession of that which is not his and 
which in the nature of things cannot be his. The judges 
interpret the law with a wonderful display of mock wis- 
dom, always straining and striving to serve interests, 
which in their essence are the interests of the morgan. 
They supplement the efforts of the legislature, and by 
means of interpretation, supply and read into enacted 
laws any omission of the legislature, to buttress the 
morgan's institution. 

The body of the lawyers, in the main, keep up a con- 
stant chatter over the mine and the thine of things, twist- 
ing and squirming to bring this side or that side of an 
individual claim either within or without the terms of 
legislative enactments and judge-made laws. These 



36 WHY THE CAPITALIST? 

lawyers thereby and in the meantime are always stand- 
ing firmly for the morgan's system of laws, always 
supporting it with all kinds and manner of shifts, fic- 
tions and chicanery. The whole of their so-called talent 
is devoted to keeping the gentile mind in such a whirl 
as not to leave it time or opportunity for calm reflection 
upon the institution and the society that this junk heap 
is designed to support and perpetuate. 

Very few lawyers have the slightest idea of their true 
position. Practically all of them will indignantly deny 
all that is here stated and they will in good faith deny 
it. But lawyers' minds have become so warped and 
artificialized that, with rare exceptions, they cannot 
grasp social or economic questions or situations. The 
vast majority of lawyers are honest in tbe belief in and 
in support of the existing legal system. They are by 
their faith rendered so much more serviceable, in truth 
indispensable, to the morgan. The lawyers may even 
rail at the morgan, try to invoke the law against the 
morgan, even refuse to stand wbere the morgan might 
see and bestow favors. That is not of the slightest im- 
portance. So long as the lawyer stands for a system of 
laws that sustains the present theory of private property, 
he is the morgan's true and faithful servant. Witness 
the ludicrous trust prosecutions by the United States 
government lawyers; of the greatest benefit to the mor- 
gan, and a veritable stufifed-club and slap-stick perform- 
ance, by which the gentiles including the lawyers are 
fooled. 

The sheriff, the policeman, the soldier and the man- 
o'-warsman merely represent the brute force always held 
in readiness to enforce the morgan's law. They are the 
bludgeon and constitute the morgan's last argument, put 
forth in the name and guise of what is claimed to be a 
just and impartial state. 



THE MORGAN AND THE GENTILE 37 

All of the State lackeys of the morgan and all of their 
machinery of government have but one office and pur- 
pose and that is to keep the morgan secure in exclusive 
possession and control of the resources of nature, the 
instruments of production and heaps of accumulated 
profits. It is their office to maintain the status quo. 
This is called the state and is paraded as the gentiles' 
state. In truth, it is the morgan's estate. The gentiles 
so serving the morgan in his estate are required to be- 
lieve and to make the other gentiles believe that this is 
a state for the benefit of the gentiles, that the gentiles 
need this state for their protection. Here the gentiles' 
natural instinct of self-preservation is played upon and 
exploited to the fullest. He is made to believe that he is 
in need of a strong government from above to protect 
and preserve his life and home, and that the strong gov- 
ernment and protection is only to be had from the state 
as at present constituted. 

The real need of the gentile for this sort of protection 
is about of the same extent and nature as was the serf's 
need for the protection given him by the baron in feudal 
times. What he needs is to find a way to shield himself 
from his protector. The condition of the serf which 
made him need the protection of the baron was the con- 
dition imposed by the baron. Oiutside of that the need 
of the serf for protection was small. Such needed pro- 
tection as he did get was meagre, inferior and dearly 
paid for. His protection was merely incidental and of 
such a form and measure as was necessary only to 
maintain and support the estate, standing and "dignity" 
of the baron. That is exactly the sort of measure of pro- 
tection that the gentiles get under the morgan's modern 
form of society and state. 

The purpose of the state is to keep the morgan in pos- 
session and power, and to hold the gentiles in subjec- 



?58 WHY THE CAPITALIST? 

tion. Protection is forced upon the gentile by his despoil- 
ment and in its very nature is all for the morgan as 
against the gentile, and none for the gentile as against 
the morgan. It is all to maintain the status quo, in other 
words, to maintain the morgan on top. The minor con- 
troversies that the gentiles have with each other grow 
principally out of their condition of subjection and re- 
sulting irritation. Th-ese sorry controversies are taken 
into the courts of the morgan's state for adjudication. 
The great show of blindfolded justice is merely inci- 
dental to and in furtherance of the principal and only 
office and purpose of the state, to keep the morgan tight 
in control and possession. These adjudications and 
court proceedings only give more prestige and standing 
to the morgan's estate. The gentile is impressed with 
a respect and an awe for the morgan's state, the true na- 
ture of which is concealed beneath much tinsel and 
trumpery. All of this strengthens the state and the 
estate of the Morgan. 

The remainder of the morgan's mercenary forces are 
the panders, sycophants and intellectual police, consisting 
of theologians, writers and teachers, who preach to and 
teach the expropriated gentile that he must not covet any 
of the things that the morgan has expropriated him of, 
any of the things that nature supplied for him and which 
the morgan with the power of the state has seized and 
holds ; not to covet any of the morgan's pile, accumu- 
lated by exploitation ; that he, the gentile, must not steal 
any of his own from the morgan ; that he, the gentile, 
must love, embrace and respect all of the morgan's im- 
posed creeds and precepts ; that he, the gentile, must be 
humble, meek, poor in spirit and always industrious ; that 
he, the gentile, must be contented with his lot in life; 
that he, the gentile, must be loyal and patriotic, willing 
and anxious at all times to fight for the state in the wars 



THE MORGAN AND THE GENTILE 39 

that it wages for the furtherance and permanence of the 
morgan's estate at home and in other fields and regions ; 
that he, the gentile, must have an unbounded faith and 
enthusiasm for the state of the morgan and with which 
the morgan expropriates him of everything expropriable. 

Here, too, the morgan avails himself of and profits by 
the wiles and arts of false teachers and preachers. That 
by far the most of these are also sincere and honest, and 
have been deluded by a mass of errors, assumptions and 
miseducation does not effect the result, except to make 
it more assured and effective. It makes these servitor's 
also, all the more serviceable to the morgan and his 
estate. 

Our ancestors have always found solace and comfort 
in religion for all their limitations and want of under- 
standing. Religion was the result of the natural strug- 
gle of the mind to know. The true domain of religion 
has always been the unknown. It was the presumed ex- 
planation of phonomena. It constituted the theory of 
the universe. There was one belief common to most 
religions, and that was the belief in some kind of a future 
life and in some kind of a place of future abode. This 
was a conclusion drawn from the phenomena which 
nature always presented and for which man had no 
scientific explanation. 

The morgan, through the craft and cunning of servi- 
tors, seized religion at an early stage and superimposed 
upon it an elaborate system of precepts and moral rules 
so-called. These, with a liberal use of postulates, have 
always been promulgated as of divine origin and as 
having been especially revealed to a few favored by a 
direct or an indirect communication from some divinity. 
These commandments all had, have and can have but 
one main and real purpose and ofiice. That purpose 
and office was and is to entrench the morgan in his 



40 WHY THE CAPITALIST? 

power of excluding the gentiles from that which always 
has been and in the nature of things is still theirs for 
common use and enjoyment. This real purpose and 
office has always been concealed under a mass of ver- 
biage. This verbiage had two noteworthy qualities, the 
one was that it led the gentile mind off into the jungle of 
inconsequential controversies over matters theological; 
the other was that it would make it appear that the di- 
vinity was especially concerned about the shortsighted, 
fretful and childish disputes of the expropriated gen- 
tiles. These two qualities won favor and made the 
masked battery a complete and perfect instrument in the 
hands of the morgan. The little pilferings and bicker- 
ings of the expropriated gentiles among themselves, 
growing out of conditions caused by their -expropriation 
and exploitation, and as nothing, and ludicrously petty, 
compared to the general common despoilment, kept and 
keeps the gentiles busily engaged with petty internal 
dissensions. 

"Thou shalt not covet" is the quintessence and ex- 
presses the purpose of all the so-called divinely revealed 
commandments. The despoiled gentiles never have had 
anything of moment to covet. The morgan always has 
been, since his reign began, in exclusive possession of 
all that can to any considerable degree arouse feelings 
of covetousness. 

The violation by a gentile of any of the laws or com- 
mandments securing the morgan's property rights in 
things that in the very nature of things cannot be his, 
if smelt out by the ferrets of the law, bring down upon 
the gentile's unconsecrated head all of the clubs of the 
morgan's state. If the ferrets cannot smell them out 
then the offending gentile is left to the torments of a 
mind filled with the terror of burning lakes in the here- 
after, and the plague of a conscience artificially ran- 



THE MORGAN AND THE GENTILE 41 

dered sore and over tender by the morgan's spiritual 
policemen. 

The present state with all its laws has never had any 
restraining influence upon the morgan's predatory dispo- 
sition. That is not their purpose. Their purpose is to 
serve the morgan and his estate. For the divine com- 
mandments directed primarily against all covetousness, 
the morgan has only deaf ears. The restraining in- 
fluence is only for the expropriated gentile. 

The third order of gentiles maintains itself largely by 
filching and wheedling from the other gentiles a part of 
the little that they have. Like the mercenary army of 
the usurping invader, they live off the subjugated popu- 
lace so far as they can. The morgan, so far as he con- 
siders it expedient and worth the cost, supplies his mer- 
cenaries with so much of their material needs and cam- 
paign material as they are unable to get by foraging. 
He does not do this directly or in a way that the ordinary 
busy gentiles notice and understand. He always chooses 
the indirect and for him more efficacious method, ever 
riveting the shackles tighter. He endows their colleges,, 
gives liberally to their churches, supports their traffic in 
charity, furnishes money for their missionary commerce, 
finances their ''onward movements^" creates pension 
funds for them,. He builds libraries where their con- 
ventional and mind-destroying drivel, under the guise 
of literature is advertised and pushed like bargain- 
counter goods. He patronizes literature and art to en- 
slave and debase them to his service. He has his agents 
to scour the world, and through the power of money 
to rob every town and hamlet of its art treasures, de- 
priving its people of the refining influence of the pres- 
ence and the traditions attached to works of art. He has 
the plunder dragged together into huge mausoleums 
where a comparatively few, and these his mercenaries 



42 WHY THE CAPITALIST ? 

for the most part, can stare at them. The effect upon 
the many regions and localities looted is of course de- 
vastating and depressing. On the other hand we see a 
concentration of the treasures so that they too are com- 
pelled to compete with each other for incompetent at- 
tention. They look like pieces of homesick stone and 
bronze, each one robbed of its native setting and atmos- 
phere, catalogued, to be vacantly gazed at by surfeited 
sightseers. 

All of this is cried forth by the claque as a patron- 
izing of art. The once highly prized gems of art might 
almost as well be displayed at the pawn broker's, or 
at the junk dealer's shop. But It serves the morgan's 
purpose. It fills the mouths of his mercenaries with 
false and fulsome praise of the morgan as a connoisseur, 
to imprss the gullible gentile. It serves as still another 
means to make the gentile believe that the morgan is a 
benefactor of his race, and so helps to conceal the curse. 



CHAPTER III. 

THE MORGAN'S REACH. 

The more primitive the mind, the more it confines 
itself to efforts at adjustment to immediate enviroi^i- 
ments, and the less capable it is to cope with the problem 
of changing the environment, in fact the less idea it has 
that there is such a problem or that environments might 
be changed. The primitive mind finds it most difficult 
to think beyond its immediate physical and perceptive 
surroundings. It encounters great difficulty in seeing 
or inferring the existence of things and influences be- 
yond the conscious physical senses, though they affect 
most potently our surroundings. Most minds cannot 
without greatly difficulty comprehend the unsensed forces 
that influence our lives. 

The fish in the ocean is constantly engaged in adjust- 
ing itself to its environments. That fish, however, has 
no conception of the thermal currents that vitally in- 
fluence its life and determine its habitat, nor has it any 
idea of the amount of water pressure required for its 
life, nor of the composition of the water in which it lives ; 
nor of the extent or volume of the ocean in which it has 
its being. 

The untutored man does not know that air is a ma- 
terial substance or that it exerts a pressure of about 
thirteen pounds upon every square inch of his body. 
He has not the remotest idea of gravitation, or of its 
effect upon his life. The most important influence on his 
life, the things that form and make his environment are 
completely non-existent to him because he has always 
confined his mentality to the adjustment of himself to his 

43 



44 WHY THE CAPITALIST? 

environment, and never looked beyond to learn of the 
things that shape and influence his environment. The 
wider the scope and the greater the effect of the non- 
prehensible things affecting our lives, the less conscious 
of them are we likely to be. 

But, for those of us who go out to explore the field 
of political economy to find the things that make our 
environment, there are many surprising and wonderful 
revelations in store. 

The understanding fairly reels when it begins to con- 
template the far-reaching effects and stupendous results 
of the expropriation of the gentiles by the morgan. 

We are accustomed to think only of the physical, 
concrete things, when considering matters relating to 
political economy. But the many things corporeal, the 
beneficial hereditiments, non-prehensible goods, that vast 
volume of mental treasure accumulated through the 
ages; the things not material that yet go with and can- 
not be without the material, and that give to the ma- 
terial an enhancement of usefulness so great as to be 
beyond the power of mind fairly to contemplate all of 
this wealth often outweighs in importance the material 
and prehensible, though it arises from, rests upon and 
depends upon the latter for its very existence and sup- 
port, much as a house often has to-day a much greater 
attributed value than the land upon which it is built. 

The whole of this vast empire of wealth goes with 
ownership and private possession of the material fur- 
nished by nature and rendered valuable by human labor, 
and it goes that way without being even mentioned 
or noticed. Under our system of miseducation, the 
gentile mind is even led to believe that the gentile re- 
mains the possessor of all this incorporeal wealth. In 
truth the gentile no more possesses it than the engineer 



THE morgan's reach 45 

possesses the locomotive or the trained workhorse pos- 
sesses the harness and wagon. 

Not any of that great wealth of intangible gifts rep- 
resenting the work, enlightenment, education and in- 
ventive activities of our ancestors, all of which add such 
vast amounts to the material wealth of the race and* of 
the world is at present possessed by the gentiles. With- 
out owning the ships, these gentiles «can not own any 
part of the benefits that result from the invention of the 
compass or the development of the science of navigation 
by our ancestors; without owning the railroads, mines 
or mills, they cannot own any of the benefits that result 
from the many inventions and discoveries of our an- 
cestors or those of which patent rights have expired. 
Archimedes, Watt, Stephenson, Arkwright, Whitney, 
Fulton, Morse, Howe and a host of others might just as 
well never have lived. 

The man who does not own the means of applying 
can have no ownership in steam power, electric power, 
water power; nor can he apply the principles of 
mechanics or the laws or science of chemistry or mathe- 
matics. The thorough understanding of these intangible 
things that are not included by the census man, does 
not give the despoiled gentile any ownership in them. 
All that his education gives him is at most a chance 
to use his thus acquired greater labor power for the 
greater power, dominion and advantage of the morgan, 
still to receive only enough to live according to his 
station in society, reproduce his kind and generate more 
labor power. The gentile would have practically as 
miuch in a state of savagery with all these powers and 
resources of nature entirely unknown. He is like the 
expert horseman who does not own a horse. His ex- 
perience is not his own to use. All that he can do with 
it is to place it at the disposal of the man who owns 



46 WHY THE CAPITALIST? 

the horse, to get in return merely enough of that which 
in truth is already his own to live upon. 

A man who designs an improvement for a steamship 
or for a railroad or a mine or for a rolling-mill cannot 
use it because he does not own a steamship or a rail- 
road or a rolling-mill. He is entirely dependent upon 
being able to induce the morgan owning the steamship, 
the railroad or the rolling-mill to accept the use of it. 
He is like the wolf in the fable at the banquet arranged 
by the stork. The delicious viands were there, but they 
were in the stork's tall jars. The wolf could not get his 
muzzle into the jars, and as his great respect for stork 
proprieties kept him from knocking over the incumber- 
ing dishes, he had to content himself with a smell of 
the good things. What a mockery it is then, to say that 
a man owns a thing that he cannot make any use of 
for himself, or derive any direct benefit from, and only 
such indirect benefit as the owner of the means of doing 
so allows. 

The owner of the means is to all intents and purposes 
the owner of the end. The morgan who has a complete 
and absolute title to the encircling wall, may laugh at 
him who claims to own the inclosed ground. So the 
man who claims ownership of wine has but an empty 
title if the wine be contained in casks that are owned, 
completely possessed, and controlled by another. He 
cannot enjoy the wine if the morgan owning the cask 
says nay. Of what worth is the science of chemistry 
or engineering to a man who has not the means of ap- 
plying it? It is worth no more to him than the morgan 
owning the means will allow. So it is that the training 
that the gentile receves is of very little benefit to him 
save as, and in the measure that he can make use of 
it in serving the morgan, and the latter makes him a 
scant allowance for on account of his extra skill. Hence 



THE morgan's reach 47 

the style and kind of regular education that the gentile 
gets is only the style and kind that the interests of the 
morgan dictate. 

The gentiles of the second and third orders are very 
little better off in comparison to what they might well 
be, than their brothers of the first order are. If they 
own any shares of stock in steamships, railroads, mines, 
mills, department stores, or banks it amounts to a very 
small and uniniluential interest. Their holdings are 
mostly in small farms or homes, burdened with mort- 
gages, small shops, catch-as-catch-can enterprises and 
occupations. Whatever they have represents the pre- 
carious condition of the gentiles of the second and third 
order. With them it is a constant nipping and pinching 
in the struggle to keep out of the ranks of the gentile 
of the first order. When they think that they are well 
off they deceive themselves by comparing favorably 
their condition with the worse condition of the gentile 
of the first order, instead of comparing their condition 
with what it ought to be, or with the condition of the 
morgan. 

It is not necessary to segregate the gentiles of the 
second order from those of the third order in consider- 
ing the effect on society at large of the small share of 
wealth that they own. 

The grievous and ludicrous error constantly made by 
gentiles of the second order is that they regard them- 
selves as capitalists and imagine themselves in the same 
relative situation as the morgan. They think them- 
selves interested on the same side as the morgan be- 
cause they are not yet pressed down as much as the 
gentile of the first order, the wage worker is. In the 
resulting unnatural condition of society, all of the 
gentiles are made to compete with each other for the 
necessaries of life, despite the natural solidarity of their 



48 WHY THE CAPITALIST? 

interests. The struggle of the gentiles of the second 
order against the morgan, are about as ineffectual as a 
pop-gun would be against steel armor. 

The gentiles of the second order are driven back to 
prey upon the gentiles of the first order and are made 
to endure the brunt of the resulting industrial wars- 
They think that they are fighting for their own interests, 
but they are not. They are only fighting for the benefit 
of the morgan, and retain very little of the spoils for them- 
selves. 

The gentiles of the third order, the intellectual and 
physical mercenaries of the morgan, present a most 
ludicrous spectacle with their show of brass buttons and 
brag of superior learning, as they steadily sink into the 
mental swamps of their own misguided choosing. Mean- 
while they are frantically screaming their tiresome pro- 
test against the draining away of the stagnant waters 
of their fake dogmas, fake laws and fake learning. 

The morgans have one primal interest in common. 
That interest is to keep the gentile in subjection. In 
all things else, their individual economic interests are 
in a constant, evergrowing implacable hostility to each 
other. The morgan is an incorrigible. He must subdue, 
he must devour. A life of peace and co-operative par- 
ticipation means death to him. Therefore his whole 
power is devoted to crushing out the thought of it. He 
has his preachers to preach competition whilst he uses 
competition to destroy, break down and oppress. There 
is and can be but one object of his being. That object 
is sole, individual rule and personal domination. There 
is a constant strife and contention among the morgans 
over the plunder taken from the gentiles. Each wants 
the whole of it. These conflicting interests in the di- 
vision cannot be and never will be reconciled. Their 
adjustments are but temporary truces. There can be no 



THE MORGAN S REACH 49 

peace among them until the last morgan has devoured 
all the other morgans, or until the gentiles have driven 
the whole brood of morgans from powen 



CHAPTER IV. 
CAPITAL. 

The consensus of the conventional definitions of 
^'capital" may be summed up in these words: 'That 
part of the produce of industry which is appHed to further 
production." 

From the foregoing, it is apparent that "capital" is 
a term applied to things of value. We shall see that 
value is that which is produced by the work of a human 
being expended upon something to make it more ap- 
plicable to satisfy human want. Separated from all 
idea of mediately or immediately satisfying human 
want, nothing has value. When our own wants are 
satisfied and we still have an abundance left over, it at 
once loses its value unless there are others with wants 
capable of being satisfied by use of it. A morgan then 
by reason of his ownership of this abundance can dic- 
tate the terms upon which the others may satisfy their 
wants. He may require of them to climb greasy poles, 
dive for pennies into bowls of molasses, catch the slip- 
pery pig, walk backwards before him low bowing. He 
may require them to part his hair, wash his face or hold 
the kerchief as he blows his nose. He may require of 
them to fetch his smelling salts or fetch his cigar. He 
may require of them to carry his hat or his cane. He 
may require of them to operate his motor car. He may 
require of them to man and navigate his yacht. In re- 
lation to none of these things is the value bestowed 
by the morgan called "capital." You may analyze every 
instance of this personal service and thousands more 
that might suggest themselves, and you will find that 

60 



CAPITAL 51 

they are all "go and come", "fetch and carry," and all 
of them are in obedience and recognition of the mor- 
gan's power to command the action and movement of 
others by reason of his power to shut off or withhold 
from them the things necessary to supply their wants. 
Without this power, all of his store of surplus value 
would be valueless, his wealth would be dross. The 
power of being boss, of ordering others around, is the 
quintessence of his wealth. 

The gentiles of the first order produce large quantities 
of value and receive a small allowance of it. The mor- 
gan takes the surplus. He consumes all that he can 
consume of the surplus in riotous and sumptous living 
and in the maintenence of a numerous train of personal 
attendants. The morgan avails himself of his owner- 
ship of the remainder in directing the movements and 
commanding the attention of other workers to obtain 
for him control of more of the free goods of nature and 
more of the means of production with the purpose of 
having yet more value produced and in such quantities 
as to let him take still more surplus value by the same 
process ad infinitum. 

That which is allowed the worker is called "wages"* 
or "compensation." The name is a misnomer because 
the morgan does not pay or give anything to the worker ; 
but on the contrary takes from him. That portion paid 
to personal attendants, supernumeraries and flunkies 
who produce no value at all is also called "wages." 

The portion of surplus value in the morgan's hands, 
the ownership of which he avails himself of to control 
the production of more value and to get yet more sur- 
plus value, is called "capital". 

Whenever we give another common name to anything 
to distinguish it from other things that look like it, we 
usually do so because something has occurred to change 



50 WHY THE CAPITALIST? 

its nature and make it different from the other things. 
There is no valid reason for giving the name "capital" 
or any other distinguishing name to value applied to 
further production. In the giving of the name "capital" 
to this value lurks a most subtle and far-reaching false- 
hood. It implies a change in the inherent nature of 
value which in truth never takes place. The falsehood 
is rendered the more deceiving because suggested, and 
not stated plainly. It implies a difference in the prin- 
ciple of its use which does not take place. To be speci- 
fic: "Capital" does not pay the worker engaged in the 
further production of value; first, because the worker 
is not paid in advance ; second, because the worker is not 
paid by the capitalist, but, quite to the contrary, makes 
his pay by producing in advance more value than he 
gets. The capitalist takes the value before he pays the 
worker. 

The purchase of tools and raw material is merely the 
acquiring of some value to have more value added by 
labor. As these tools and this raw material were pro- 
duced by the application of labor to the goods in the 
store house of nature, the purchasing of them consists 
only of commanding others to come and go, carry and 
fetch. 

What difference is there in exercising power to com- 
mand between "fetch my smelling salts" and "fetch a 
ton of coal"; or between "build me a mill" and "make 
an omelette for me"; or between "carry my cane" and 
"carry that bale of goods"; or between "start up my 
yacht" and "start up that mill"? True, their ultimate 
or remoter purposes may be and are different. But the 
exercise of the power, and the approximate purpose is 
the same. It is commanding others, making them jump, 
making them come and go, fetch and carry, bring things 
together and separate other things. In the one case it 



CAPITAL 53 

is done by the morgan for an immediate gratification, 
for the mere pleasure of seeing men jump and run; and 
in the other case both for this present gratification and 
pleasure and for the further gratification of raking in 
more surplus value, for which he has no more use than 
to make still other and more men jump and run and 
cry for bread. The far greater reason that moves the 
opulent morgan to have work go on is the pleasure it 
gives him to dominate others. 

The only purpose served by the use of the term 
"capital" is to make it seem that a distinction exists 
where there is none in fact. It serves to support a fiction. 
This fiction is that the accumulated surplus value in 
the hands of the morgan produced by the worker and 
for which the worker was not paid anything has by some 
necromancy been turned into a fairy that produces more 
surplus value throughout the year for the morgan; that 
the worker has not produced the surplus and therefore "in 
justice and good conscience" is not entitled to it or to any 
portion of it. 

This trick of attaching a label to a thing is not unique. 
The claim of an entirely new quality or attribute for 
a thing solely because of the new name is a frequent 
occurrence. It is most efficacious in misleading. It 
renders things dark and muddy that otherwise would 
be clear. The ruse has been successful only because it 
was not thought of any consequence when it was begun. 
It was not of much consequence then, it is true. People 
got used to it before it became of consequence and were 
then loth to question that which time had established. 
The resulting inconvenience and confusion of thought 
in the efforts to reason out the problems that grew up 
around the subject was charged either to other things 
or to the supposed inherent abstruseness of the problems 
themselves. 



54 WHY THE CAPITALIST? 

Now if a horse be used to draw coal for consumption 
under the boiler of a private yacht or of a freight boat, 
it is still a horse. The coal consumed on the freighter 
is "capital", that consumed on the yacht is not. A 
locomotive engine is not called by any different name 
when it is running east from the name it has when run- 
ning west. Oats fed to a saddle horse used for pleasure 
are not called "capital" though they may be out of the 
same bag as oats fed to a working horse. Yet the oats 
that the draught horse eats is called "capital." 

If the wage-slave were a chattel-slave producing value 
for his master, and receiving his daily rations from his 
master, then those rations would come under the classi- 
fication of "capital." As wage slave he receives his 
lations just the same, though it may be in different form 
or a little different measure. Yet the food of the wage- 
slave is not called "capital." 

If A hires B for so much a month or year with board,, 
then every morsel B eats during the term is "capital" 
when viewed from the point of view of A, because it is 
value used in the production of more value. Not so from 
B's point of view. 

"Capital", as the conventional economists use the 
term, stands for confusion of thought and muddy reason- 
ing. 



CHAPTER V. 
WHAT IS CAPITAL? 
The Elements of Value. 

The argument for the wage system of productive in- 
dustry may be fairly stated to be: (1) That there can 
be no considerable production of value without capitaL 
any more than there could be any production of value 
without labor. (2) That capital participates in the pro- 
duction of value, therefore is entitled to compensation 
by way of return upon the investment, just as the laborer 
is entitled to compensation in the form of wages for his 
services in the process of production. 

We must here get a clear understanding of our princi- 
pal terms so as to avoid confusion of thought. Capital 
has been defined by all the conventional economists as 
meaning that value which is used in the production of 
m.ore value. But here they stop. They give us three 
vaguely understood words that yet are of the highest 
importance. These should also be most clearly defined. 
The words are "value", "used" and "protection". We 
can make no progress otherwise. The greatest of fal- 
lacies flow from the false assumptions that lie in the use 
of these three simple words by the conventional economists. 
This chapter will be devoted to an examination of the sub- 
ject of value. 

The conventional economists tell us that here is a 
"use value" and an "exchange value." All that they 
tell us in this regard is that considerations of value some- 
times arise in connection with the utility of goods, and 
sometimes in connection with the exchange of goods- 

55 



^6 WHY THE CAPITALIST ? 

We learn nothing of the nature of value from such teach- 
ing. 

We are also told that some value is "value from pro- 
duction" and that some value is 'Value from obligation". 
Such sage utterances can relate only to the method of 
the acquisition of value by the individual, namely, that 
some get value by producing it and others have value 
given to them in discharge of obligations. We are not 
enlightened much on the nature of goods by being told 
that some of them come by slow freight and some of 
them by fast mail. 

Other conventional instructors tell us of values that 
arise out of ''marginal utilities." Their theory is that value 
and the extent of value is dependent entirely on how 
badly human beings want the things that contain certain 
satisfaction-giving qualities. Nor is there any light 
afforded us by this information to assist us in the in- 
quiry as to what constitutes value? 

The class of writers that have given us the sort of 
information referred to could just as well have told us 
that there are strayed cats, lost cats and stolen cats, and 
then call their work an analysis of the nature of cats. 

There were however two writers who in the course of 
their work did approach a discussion of the nature of 
value. These were Karl Marx and John Stuart Mill. 
Marx in his great work "Capital", says: 

**It thus becomes evident that since the existence of commod- 
ities as values is purely social, this social existence can be expressed 
by the totality of their social relations alone, and consequently that 
the form of their value must be a socially recognized form." 

Karl Marx was a profound student of the writers on 
political economy that preceded him and did not escape 
being to some extent drawn into their method of reason- 
ing, although he was most unrelenting in his warfare 



CAPITAL — THE ELEMENT OF VALUE 57 

upon them, and time has proved the eminent success 
with which be labored. 

Marx struck the right cue when he said that the nature 
of value is purely social. Had he followed that cue to 
its logical conclusion he would have spared himself a 
great amount of work and would at the same time have 
spared his readers much of the unnecessary brain-weary- 
ing effort involved in reading "Capital". Marx labored 
under the disadvantages that usually burden the pioneer. 
Much of his effort was consumed in the clearing away 
of underbrush. 

John Stuart Mill said: "Value is a relative term." 
Herein and to that extent we can agree with him. But 
then we have the all-important question: "Relative to 
What"? Mill says that value is relative to things only. 
Here is where I disagree with him. Value is relative 
to human beings Hving in society, and has to do only 
with social relations. Mill says "the value of a thing 
means the quantity of some other thing, or things in 
general which it exchanges for." The trouble with this 
statement is that a thing do.es not exchange itself for 
another thing. All of the exchanging is done by man. 
It is the difference between a transitive and an in- 
transitive verb. The man who desires to exchange a 
thing for some other thing must find the man who owns 
the other thing and agree with him on terms. Their 
minds must meet and agree on an estimate of the amount 
of the respective values to the extent of effecting the 
trade. Under the present conditions value is entirely a 
matter of individual opinion and all statements of its 
extent or measure are wholly and vaguely speculative 
in their very nature, and can n ever be otherwise until 
the system under which we live is changed. Evaluation 
is at present nothing but guess work. 

The conventional economists do not intimate whether 



68 WHY THE CAPITALIST ? 

value IS a substance or a quality, whether it is concrete or 
abstract, whether it can be measured by the yard or by the 
gallon, or by the hour, or whether it can be weighed. 

The statement of Mill, and that is as good as any 
coming from the conventional economists, means that 
the thing xa exchanges for the thing xb because the 
thing xa contains as much value as the thing xb con- 
tains. That of course means also that the thing xb 
exchanges for the thing xa because the thing xb con- 
tains as much value as the thing xa contains. This 
beautiful piece of reasoning brings us right back to the 
point that we started from. It leaves us as wise as we 
were before. 

The lucubrations of Mr. Mill and all of his school 
deal with value as if it were a thing unlike anything else 
in the heavens above or on the earth beneath or in the 
waters under the earth. All other comparable properties 
or attributes expressed in quantity, or compared for 
any purpose, have the benefit of definitely statable meas- 
urements. We can measure distance, we can measure 
time, we can measure bulk, we can measure heat, we can 
measure light, we can measure movement, we can meas- 
ure velocity, we can measure energy, electric, steam, 
gaseous, hydraulic and atmospheric. We can measure 
all of these things accurately and to a nicety. The con- 
ventional economists pretend very learnedly to treat of a 
science of values, and yet they leave us in the dark as 
to what value really is. They leave value a vague, un- 
definable thing that cannot be weighed or measured. 

The reason for this is very plain. A statement of the 
one essential of value, would show that their whole sys- 
tem of political economy is without support and cause 
it to fall together like a house of cards. 

The term value, because of popular usage, has shades 
of meaning with which I am not concerned in this work. 



CAPITAL — THE ELEMENT OF VALUE 59 

I am interested only in its connection with and bearing 
upon public or political economy. 

There can hardly be a public where there is only one 
lone man. Therefore there cannot be any consideration 
of public or political economy in such a world. If that 
one man catches a fish or kills a deer, and not being 
able to devour the whole of it at one sitting, he hides 
the remainder so that he can come back to it again from 
time to time to have another bite, he has left part of 
his labor stored in the uneaten provisions. Here we 
have two of the elements of value, namely, something 
useful and stored up labor power. But the third ele- 
ment necessary to constitute value is entirely wanting. 
There is an entire absence of human society. In a 
politico-economic sense there is not and cannot be any 
consideration of value there until another man comes 
along who might want some of the fish or venison. 
Then we shall immediately have human society, and 
that is what we are dealing with. 

It were bootless to argue as to whether or not any 
value can be in the thing in itself when only one man 
is interested. He does not trade things with himself 
for other things. As well argue as to whether or not 
that value in the thing in itself could still be and con- 
tinue in the absence of any human being. For instance, 
if the lone savage swallowed a fish bone, or took sick 
from ptomaine poisoning, and died before he had eaten 
all his store, where would the value in itself be then? 
What becomes of it? One might with no less point 
or relevancy in our field of inquiry, just as well stop 
and argue over the question as to whether or not a lone 
living being who had never met or had commerce witH 
another human being, would be or could be possessed 
of conventional language so as to talk to himself as well 
as trade with himself, whether he could ever develop 



60 WHY THE CAPITALIST? 

the idea of communicating or trading without ever hav- 
ing anyone to communicate or trade with, or could have 
any other idea before he had any experience. Or one 
might as well discuss whether or not it is possible to 
receive a concept of distance or time in an absolutely 
vacant cosmos. These are purely academic questions so far 
as the matters in this work are concerned. I am considering 
here the matter of human society, man's relationship to man. 

Take for instance the shave that a barber gives a 
customer. Here we have the three elements that make 
up value in the service performed by one man for an- 
other, producing for him the comfort of a clean face. 
Here are usefulness, human effort and human society. 
When we come to consider production we shall see that 
shaving a face is no different in the principle of labor 
than sawing off a board or the making of a coat. As 
the barber gives the shave to the customer it has value^ 
for there is the social relation. But the customer can- 
not give that same shave to another. It cannot be made 
to enter into social relationship, any further. It can no 
longer be regarded as having value. If the man shaves 
himself there is no social relationship in the transaction 
and to say that that shave has value in the politico- 
economic sense is to indulge in a meaningless phrase. 
One could say the same for the act of the man blowing 
his own nose or washing his own hands or for anyone of 
many other similar acts. 

Value is entirely relative. It relates however to 
human society. In the absence of human beings there 
could not be any value whatever. None of the other 
measureable qualities and attributes depend upon the 
presence or the existence of man. Distance, bulk, 
weight, time, etc., may very well exist on a dead and 
uninhabited planet. But there could not be any value 
there whatever. 



^ CAPITAL — THE ELEMENT OF VALUE 61 

Value is therefore social. It can only exist in human 
society. If only one human being lived upon this planet, 
there could be no value. This lone man would not be 
able to exchange anything with any other human being 
for any other thing. There must be a human society in 
which one man may exchange the ownership of one 
thing for the ownership of another thing. It is only 
another way to state the proposition to say that a thing 
must be brought into human society before it can have 
any value whatever. 

A million tons of the very finest of anthracite coal 
at the bottom of an ocean a thousand fathoms deep 
would have absolutely no value until some one brought 
it to the place where human society existed so that one 
man could exchange it for other things that other men 
had and would exchange for the coal. Then and then 
only could it have value. The entire value in this coal 
would come into existence because of the expenditure of 
human effort. Labor, therefore, constitutes all the value 
that there is in the coal. 

Nor does the usefulness of any article or substance, 
or the necessity of having it impart value to it. We 
could not live without water, yet water in itself has 
no value. In front of me lies Lake Erie, an immense 
body of fresh wholesome water as provided by nature, 
in sufficient volume for all. If I transplant myself to 
its shore I will there have all the water I want, free 
for just the drinking of it and bathing in it. Yet there 
the water has no value. But here I am in my office 
overlooking the lake a mile or more away. If under 
primitive conditions some one should bring a pail of that 
water from the lake to me for my use and comfort, that 
same water in his pail would contain a value and I 
would be under obligation to give an equivalent of that 
value, contained in something else in return for it. I go 



62 WHY THE CAPITALIST ? 

to the tap at the basin in my room and turn on the water. 
Here also this water has value. The element of value 
is the conscious human effort that was expended to bring 
the water to the place where it could be of service to 
another. 

Take the air we breathe. Here we have every one 
of the elements that make it a necessary of life. Yet it 
lacks value. No possible effort of any person is required 
to make air available for another person to breathe. 
Therefore it is not a subject of exchange, does not effect 
the relationship of one man to another, or in the slight- 
est degree effect the social relations. Should anyone 
still assert that air has value, ask him what is the meas- 
ure of that value, how he will measure it. Whilst there 
may be unmeasured value, there cannot be immeasure- 
able value any more than there can be imponderable 
weight. What is the amount? There can be no value 
unless you can find its equivalent any more than there 
can be a conception of a yard without a standard of 
measurement. Who is the owner, who the buyer, who 
the seller? If anyone answer that the air we breathe 
is worth life, I shall answer that he is indulging in 
senseless phrases. To whom would the life be payable? 
The moment you paid the life it would end, it would be 
valueless, death ensues. 

If some morgan could devise a scheme to shut off the 
air, and charge a price for each cubic foot of it we 
breathe, he could doubtless drive a lucrative business. 
He would doubtless even flatter himself into believing 
that he was rendering a most valuable service by supply- 
ing us with air! But it will readily be seen that he is 
not adding the element to give value. His efforts would 
all have been the other way. His efforts were not to 
make an application of this air to our want. It was to 
keep us from having that which nature gave us, save 



CAPITAL — THE ELEMENT OF VALUE 63 

as we gave up to him in such measure as he dictated. 
He would enslave me, make me pay tribute to him, 
make us buy of him that which was already ours and 
which he had stolen from us. 

Now it is possible to add even to air the element that 
would give it true and measurable value. A man might 
compress air into tubes, or he might extract and confine 
in packages the essential parts of air necessary to sus- 
tain animal life, so that it might be taken on a submarine 
boat trip where it would be available to sustain life. It 
might be used in high altitudes for the same purpose; 
or it might be used for medicinal purposes. Or it might 
be used in tunnel building, or it might be used to driv^ 
drills or other machinery. Here again we should have 
value created by labor in compressing the air, or in ex- 
tracting the oxygen. 

So too, value may be put into the sun's heat by labor 
in the building of solar engines to generate power, with- 
out the consumption of fuel. The sun's rays there are 
utilized directly and made a vehicle of value. All of this 
value is the result of human labor. 

The very pull of the earth, gravitation, devoid of value 
in itself, has value imparted to it by labor, and labor 
alone. Without labor there could be no power generat- 
ing equipment at any of the water falls to utilize the 
pull of the earth through the medium of falling water 
to run mills, operate distant electric motors and furnish 
light. Labor expended for a useful purpose in human 
society is all that there is of value in these things. All 
of the rest are free goods of nature. 

The other illustrations that might be added are legion. 

Yesterday I was out on the lake alone in a boat for 
pleasure and recreation. I was anchored over a rocky 
reef at least five miles away from any other person. The 
black bass were disporting in the clear water below me. 



64 WHY THE CAPITALIST ? 

These fish had no value where they were. I caught one, 
cooked it and enjoyed a feast. Still there was no value 
produced. The fish did not enter into consideration be- 
tween me and anyone else. There was no social re- 
lation, therefore there could not be any value. Wherein 
did my taking the fish from the lake and eating it differ 
in principle from my dipping water from the lake and 
drinking it, or filling my lungs with the bracing air? 
It is true the fish gave me sustenance. So did the water, 
so did the air. It is true that if any one had come upon 
me and demanded the fish I could rightfully have re- 
fused to give it to him. But if he had demanded the 
water that I had just dipped up to drink, or if he had 
demanded that particular portion of air that I was just 
then enhaling I could with equal right have refused to 
give it up. Here a social relationship arises. There and 
then we should have the additional element introduced 
to present to us the subject of value. The demand made 
upon me by my new companion for my service is a de- 
mand for value. Upon my complying with his demand, 
the cup of water and the fish became the medium by 
which my companion receives service from me. Here 
we have a transference of, a handing over of the only 
thing that can properly be called value, namely, labor 
service in relationship to human society. Neither the 
cup of water nor the fish in itself can properly be called 
value any more than an electric wire can itself be called 
the electric current that it conveys. 

The life sustaining or serving properties of things do 
not in themselves constitute or impart value. The air 
I breathe, the light from the sun, the heat from the sun, 
the attractive power of the earth that enables me to be 
upon it and move about, the attractive power of the 
sun, planets and stars that hold the earth to this solar 
system, the orbit or track that the earth moves in around 



CAPITAL — THE ELEMENT OF VALUE 65 

the sun, nature's laws of chemistry, mechanics, etc., are 
all necessary for the maintenance of life in the forms 
that we see. Yet none of these things can be said in 
itself to have value. If the contrary be asserted, then 
what is the value of sun light, or sun heat? In the very 
nature of things, none can be weighed, measured or esti- 
mated. All of those things exist independently of man, 
and are not the subject of exchange. 

Labor service has a beginning and an ending. It has 
scope, quantity and gradation. It can be accurately 
admeasured. Its equivalent is readily ascertainable, 
and it can readily be exchanged for its equivalent. That 
equivalent is a like amount of labor service. The 
equivalent of the value in the cup of water given by me 
to my companion or in the fish, is a cup of water dipped 
up by him at the same place, or a like fish there taken 
by him and banded to me; or the expenditure by my 
companion of a like amount of effort in rendering me 
some other labor service. 

This admeasurement and exchange of value it might 
be said is upon the basis of unskilled labor. A giant in 
strength, born full grown, could not perform the simple 
act of dipping up a cup of water until he had acquired 
the requisite skill and understanding in the use of his 
physical powers and the handling of the cup. Skill is 
the product of previous simple labor that enters into 
the performance of the skillful act. 

If some morgan had obtained from some prince or 
potentate, or lured from some legislature or other 
sovereign power a patent or grant of this great expanse 
of water and posted armed guards along the shore, for- 
bidding me to drink of the water or take any of the fish 
except upon the terms imposed by him, then we should 
have the interposition of an alleged property right based 
upon and having its origin in the exercise of a superior 



66 WHY THE CAPITALIST ? 

force for the gratification of this morgan to my detri- 
ment. Here I shall be confronted by the exercise of a 
war power against me and in favor of the morgan, tak- 
ing from me by force that which nature gave to me in 
common with others of the past, the present and the 
future generations and giving it to the morgan. This 
morgan would then impose terms. If I wished to take 
water or fish from the lake I would be compelled to pay 
him a price. This price is tribute pure and simple. Not 
a particle of value has resulted from my exclusion at 
the hands of the morgan or at the hands of the sovereign 
for the benefit of the morgan. 

Or perhaps the morgan will decide that he will dip 
the water from the lake for me to drink or take the 
fish from the lake for me to eat. The morgan would 
then have some right to say that he had given me this 
service of which the water, or the fish, was the vehicle, 
hence have given me value. It will be noted that I have, 
said "some right". I have in mind and will now say 
only in passing, as I shall come back to the subject in 
its proper place, that this right is very much incumbered. 
In the first place and for the purpose of enhancing its 
quantity, the morgan adulterates the value by mixing 
with it the water, or the fish as such. In the second 
place, the value that the morgan does give me is tainted. 
It is saturated with the motive for gain, for profit, for 
the purpose of getting more in return than an equivalent 
in value for the value given by him. It differs from the 
transaction I had out on the lake. I dipped the water 
from the lake and handed it to my friend. He drank it, 
then dipped some water up and handed it to me. I took 
a fish and gave it to him. He ate the fish. He there- 
upon took a fish and gave it to me. I ate the fish he 
gave me. True, I was actuated by selfish motives. So 
was my friend. I desired the pleasure that comes from 



CAPITAL — THE ELEMENT OF VALUE 67 

being pleasing to my associates, the pleasure that comes 
from a spirit of abandon, the pleasure that comes from 
a self-confidence, from a casting out of all fear for my 
own future bodily comfort and sustenance, the pleasure 
of the mental attitude that comes from the physical act 
of treating lightly questions of my own comfort. Then 
there is the selfish desire of having my friend to regard 
me as being noble minded and companionable. My 
friend in returning the favors is actuated by the same 
motives, and finds pleasure in being equal in every way 
to the standards that excite admiration. This mental 
attitude necessarily excludes all idea of extolling the 
value of the services that either of us rendered. The 
very nature of the situation renders it degrading, in our 
minds, for either of us to suggest in the slightest degree 
that he was giving anything of great value to the other. 

How different the transaction of the morgan! This 
creature hands the cup of water or gives the fish, not 
for the purpose of any pleasure in the act or to gain 
friendship, good fellowship or esteem. He is in busi- 
ness. His motive is to get the largest immediate return 
for the least outlay of effort. There is the motive to 
give no more service than just enough to present a show 
of value. There is the intermingling of the means of ex- 
tracting tribute, the taint of coercion. Superadded to 
all, and as a corollary, there is the further motive to tell 
falsehoods, the puffing of wares, the effort to show values 
in excess of what they really are. 

Other things are subject to the same analysis. The 
coal in the earth put there by the same nature that 
placed the water and fish in the lake has no value until 
one human being brings it to another human being who 
has need of it. The exclusive possession of the ground 
in which it lies imbedded has its origin in and depends 
for its continuation upon the war power of the sovereign 



68 WHY THE CAPITALIST ? 

t^hat excluded the rest of mankind from it and gave 
it to the morgan. This exclusion of the rest of mankind 
gives no value to the coal. It only gives to the morgan 
the power to exact tribute from me whenever I want 
to get coal, in the same manner that he would exact 
tribute to let me breathe the air, drink the water or take 
the fish. 

The same is true as to the deer in the forest, the fruit 
and the roots that grow there and the grain that grows 
in the wilds. I may take them and eat them, yet there 
is no more value there, or consumed, than is contained 
in the open air that I breathe, or the many other neces- 
saries that I take and that nature has provided for all 
living creatures. One is as conducive as the other to 
life. Yet value does not enter until a human being ex- 
pends effort to kill the deer, pick the fruit, cut the grain 
or dig the roots, and bring them to another human be- 
ing for the latter's use. So when the hunter kills the 
deer and brings it to me he is creating value, first by 
killing the deer, then by cleaning it, then by transporting 
it, the farther he transports it the more value he creates. 
I accept the venison and pay him. In doing so I am 
not buying the venison in itself, whatever popular 
speech may say. I am in truth and in fact buying the 
value that the hunter created, I am buying the result 
of his labor. The deer in the forest was mine as much 
as it was his and his as much as mine. It became a 
means and vehicle to hold and convey his labor as the 
pail was the means of conveying the water that took 
in and conveyed the labor of the man who brought the 
water to me. The same is true of the fruit, the grain 
and the roots. To say that I buy them is only a figure 
of speech. What I buy is the labor service of the man 
who gathered them. 

The value in the produce of the cultivated fields and 



CAPITAL — THE ELEMENT OF VALUE 69 

pastures is of the same nature. It consists of the labor 
imparted to and into the free goods of nature, rendering 
them more serviceable and more available for the pro- 
motion of human life, comfort and happiness. 

As a result of the foregoing considerations I should 
say: 

Value is that which results from the applied effort 
of a human being producing a usefulness in whole or in 
part of which another human being may avail himself. 
Anothqr good definition would be: The transmittable 
good brought into human society by human effort. 



CHAPTER VI. 

CAPITAL. 

What is Meant by the "Use" of Capital in Production? 

"Use", in the sense that value is used in the produc- 
tion of more value, means to employ value for the at- 
tainment of a purpose and end. Now as all value is the 
result of human labor, when one says that value is used 
in the production of more value, all tfiat possibly can 
be meant, in reason, is that the labor of the past is added 
to and enhanced by the labor of the present, and that 
this orderly system of production results in an ever increas- 
ing volume of value. 

To call some of this value capital, and so give it an- 
other name serves one and only one purpose. It be- 
clouds the mind. Human labor is expended upon the 
free goods of nature, making them mediately or immedi- 
ately either applicable or more applicable to the satisfy- 
ing of human wants. Separated from all idea of satisfy- 
ing human wants, nothing has value. When the wants 
of the morgan are satisfied and he still has an abund- 
ance of value left over, that abundance would at once 
lose its value if there were not others with wants cap- 
able of being satisfied, and without any other means 
of being satisfied than from this surplus that the morgan 
still has on hand. 

The morgan by reason of his control of the surplus 
can dictate the terms upon which the rest of humanity 
may satisfy their needs. He may require them to climb 
greasy poles, immerse their faces into basins of molasses 
for pennies, catch the slippery pig, walk backwards be- 

70 



CAPITAL — WHAT IS MEANT BY "uSED"? 71 

fore him, low bowing in servile obeisance. He may re- 
quire them to part his hair^ wash his face or hold his 
kerchief. He may require them to fetch his salts or 
his cigar, or to carry his cane. He may require them to 
operate his motor car. He may require them to man 
and navigate his private yacht. In none of these things 
is the value applied by the morgan in paying for this 
entertainment or whim-dictated service called capital. 

You may analyze every instance of employment and 
thousands more that might suggest themselves, and you 
will find that they are all to go and come, to gratify 
whims and do reverence. All of them are in obedience 
and in recognition of the morgan's power to command 
the acts and movements of others through his property, 
power to shut oflf from them their supply of the free 
goods of nature, as well as the value imparted to those 
free goods of nature by human labor. To shut these 
things off is to shut off the necessaries of life. Without 
this power of the morgan, all of his store of surplus 
value would be valueless. His wealth would be dross. 
The power of being boss, the power to dictate to others, 
to order them around, is the quintessence of all that is 
attractive in bis wealth. 

The workers produce large quantities of value. After 
they have produced it, they receive out of it that dole 
necessary for them to have so as to live and produce 
m.ore. The morgan consumes all that he can consume 
of the surplus in riotous and sumptuous living and in 
the maintenance of a numerous train of personal at- 
tendants. A huge residue of value still remains. This 
the morgan graciously permits the gentile still further 
to enhance. All this however is done, as before, under 
the terms and conditions imposed by the morgan. For 
it is all his property. All this, so that he can keep 
right on in the same process, extending ever his power 



'^2 WHY THE CAPITALIST ? 

to wider and wider spheres, so as to be able to drive and 
harass an ever increasing number, without end and with- 
out cessation. 

The dole which is allowed the producer of value, is 
called wages. From the morgan's point of view it is 
capital. He regards it as value used to produce more 
value. The same is true, to him, of the oats fed to the 
draught-horse. The dole which the morgan gives to his 
personal attendants and flunkies who produce nothing 
is also called wages. But this is not regarded as capital, 
for it is not said to be used in the production of more 
value. Nor are the oats fed to the polo pony regarded 
as capital. 

There is no basis in reason for giving a different and 
distinguishing name to value to which more value is 
added in the course of further production. The nature 
of that value is not changed a particle by increasing 
its volume. It Is still social and relative, though its 
function may be changed. It were just as reasonable 
to give a distinguishing name to the sand itself in the 
bottom or the middle of an artificially produced sand 
pile, because without there being sand at the bottom 
or in the middle of the sand pile, there could not be any 
on the top. It is true that without the bottom and the 
middle there could not be a top to the sand pile, but 
it was labor that placed the sand upon the bottom, and 
into the middle and then into the top of the pile. The 
bottom did not create or help to create the top of the 
pile any more than the top created or helped to create 
the bottom. 

Vou could not have a glass full of milk unless you 
had some milk in the bottom of the glass. Yet who will 
say that the milk in the bottom of the glass produced 
or participated in producing the milk in the top of it? 
Who would say that the milk in the bottom of the glass 



CAPITAL — WHAT IS MEANT BY "uSED" ? 73 

is capital and is entitled to pay for the service of hold- 
ing up the milk on top? 

This trick of sticking a new name on an old thing 
has a wonderful effect of fooling us for a little while. 
A gambling room is called a tombola, and everybody 
thinks it is something different, until he has gone into 
the thing and finds out. When I was a boy the public 
drinking places in this country were called bar-rooms. 
Presently new names were attached over their doors. 
They were called saloons, then sample rooms, then 
buffets, then grill rooms. Every time a new name was 
tacked on it suggested that the thing was different. 
The purpose was the same. It was to make your mind 
defer to the suggested lure that here is something su- 
perior, something new and therefore something nice. 
But every time that we went into one of these places 
with a new name and looked it over we found out that 
it was just the same old bar-room. As soon as such 
a name became common and everybody familiar with 
it, a new name appeared. 

This thing, or game, or institution, whatever you may 
have a mind to call it, parading as capital has never been 
gone into by the exploited masses before our generation 
and looked over carefully. But we are now going into 
it, and are tearing down the curtains and draperies and 
turning the search light into the dark corners and private 
stalls. And we find that this mysterious name is simply 
a device and mask of the same old occupation of the 
robber-barons and highwaymen of former times. 

Yet the device and mask is most crude and absurd. 
If a horse be employed to draw coal for consumption 
under the boiler of a freight boat, the horse and the 
coal are both capital as also the boat because "used to 
produce more value." This same horse employed to 
draw coal to be consumed under the boiler of a pleasure 



74 WHY THE CAPITALIST ? 

yacht, if the coal is being sold by a dealer for profit, 
is still capital, but the coal ceases to be capital as soon 
as it is delivered to the pleasure yacht. Now if the 
horse, the coal and the yacht all belonged to the same 
man, then none of these things would be capital. 

Oats fed to a polo pony by its owner are not capital- 
But when a grocer's delivery horse eats oats, though out 
of the same bag, he is eating capital. 

To multiply illustrations any further does not seem 
to be necessary. 

In the use of this distinguishing name, capital, where 
there is no distinction, lurks the subtle and far-reaching 
deception. It insinuates the notion of a change in the 
nature of value, which change in truth has never taken 
place. The deception is rendered all the more mis- 
chievous because suggested. As the setting hen accepts 
as her own, the chicks of strange eggs hatched by the 
warmth of her body, so in like manner does the un- 
suspecting mind accept as its own the absurd notions 
and deductions that its own warmth generates from 
seeds of falsehood insinuated into it by and through the 
wiles and powers of suggestion. 

It is boldly claimed that wages, so-called, paid for pro- 
ductive labor is capital, because forsooth it is value used 
in the production of more value. The truth of the mat- 
ter is that the worker receives nothing until after he 
has produced the full value from which he receives his 
allowance called wages. So far as the worker's wages 
are concerned it cannot in the first place be said that 
they are advanced at all, or that the value that is called 
wages is capital. That value could surely not have been 
used in the production of more value when it was not 
in existence at the beginning of such production and 
only came into being as a result of the operation of 
production. 



^ CAPITAL — WHAT IS MEANT BY "uSED" ? 75 

The morgan does not in fact pay anything to the pro- 
ductive worker, because the worker produces and gives 
up to the morgan in advance the value produced. It is 
the morgan, if anybody, that takes pay. The worker 
hands over large quantities of value, big bills as it were, 
to the morgan, and the morgan graciously tosses back 
a little small change to the worker. The amount of 
the small change depends entirely upon how much it 
takes to maintain the worker so that he can continue 
in the, to the morgan, profitable and agreeable occu- 
pation. 

The fact that the morgan in taking the value pro- 
duced by the worker is actuated by the motive and 
purpose of changing it into another form called money 
cannot make any difference in the principle. It is value 
in the form that he gets it, and it is value after he has 
changed it into the form of money. He gets value, 
returns a portion of it to the man he got it from, calling 
the returned portion wages. That surely is not advanc- 
ing wages or anything else. Nor is it using value for 
the production of more value. The process is simply 
that of getting another to produce or to add value to 
the material worked upon, and then letting him have 
a modicum to live upon. 

The purchase of raw material and tools by the mor- 
gan, in its essential quality consists only in exchanging 
value in one thing for value contained in another thing. 
What difference is there in the command to fetch a case 
of champagne and the command to fetch a ton of coal; 
or between carry my cane, and carry that bale of goods ; 
or between start up my yacht and start up my mill? 
True, their ultimate or remoter purposes may be and are 
different. But the exercise of the power and the immediate 
purpose is to direct the movements of another and are In 
their nature the same. It is commanding others, making 



76 WHY THE CAPITALIST? 

them jump, come, go, fetch and carry, bring things to- 
gether, and put other things apart. In the one class of 
cases it is done by the morgan for his immediate personal 
gratification, for the mere pleasure of seeing men jump and 
run; and in the other class of cases it is for the same 
immediate gratification and pleasure, but also for the fur- 
ther purpose, gratification and pleasure that the morgan 
gets from raking in more surplus value. For this further 
accretion of value he has no other use than to make still 
other and more men jump and run and whine for bread. 
By far the greatest reason that the morgan has to have pro- 
ductive work go on is the gratification to his self-love that 
comes from being able to direct and dictate the activities 
of a multitude of other people, if not directly, then in- 
directly, but equally if not more effectively. 

The word "capital" supports a fiction. That fiction 
is that the accumulated surplus value in the hands of 
the morgan, and produced by the worker, and for which 
the worker was not paid, has by some legerdemain been 
turned into a philosopher's stone that lures forth more 
and ever more surplus value from the beautiful island 
of somewhere for the favored morgan, and that the 
v^orker is not entitled to any more than just such meagre 
portion of the total value produced as will be sufficient 
to keep up the supply of workers. 



CHAPTER VII. 
CAPITAL PRODUCTION. 

All production, of whatever kind or nature, consists 
in the bringing together or the separation of things. 
It is carrying and fetching. Nature produces a potato 
by bringing together water, starch, sugar, albumen, 
gum, asparagin, fat, solamin, nitrogenous substance and 
ash. She produces beef by bringing together water, pro- 
tein, fat and ash. She produces air by bringing together 
oxygen and nitrogen. She produces water by bringing to- 
gether hydrogen and oxygen. Nature brings together all 
the ingredients of honey and deposits them in the many 
different kinds of blossoms. Bees gather this honey to- 
gether in their hives and man takes it from there to 
market. We say that the bees make the honey. But 
every act in the process by which the honey is produced 
and finally placed upon the market consists of carrying 
and fetching, combining and separating. 

Man separates the potato from the ground, brings it 
into contract with salt and water, and boils it in a pot, 
or bakes it in an oven. By continuing the process of 
separating things and bringing things together, man 
produces food from the potato that was in the ground. 
Man kills the ox. This facilitates the operations to 
follow. He removes the hide and the offal. Then he 
separates the carcass into a number of parts, carries the 
parts to a number of different places for further dis-» 
tribution. The separation into parts and the distribution 
is continued. The beef is brought together with water, 
vegetables or cereals, and seasoning, and is boiled in a 
pot. Then we have soup. Some of the beef is roasted 

77 



78 WHY THE CAPITALIST ? 

and thereby its particles brought into other relationships 
with each other, and into combination with other articles 
of food. There we have a dinner produced. Brought 
together and boiled with potatoes, cabbages, beans, peas, 
onions and what not, a New England boiled dinner 
is produced. The coal, wood, stove, fire, etc., were also 
brought together to produce the desired result. 

A tree is cut down. This is a removal of the tree 
from its position in the earth. Its branches are lopped 
off, the trunk sawed up into boards, sills and scantlings ; 
all a removal, a severing of one thing from another. 
Then the separated parts of that tree are carried away, 
maybe on a railroad train, brought together with sepa- 
rated parts of other trees, and when bricks, mortar, 
nails, glass, paint, oils, putty, iron, locks, hinges, etc., 
are brought into proper relationship with them, a house 
is the result. Every time a board is sawed a portion 
of that board is removed from another portion, there is 
a displacement of matter. Every time a board is nailed 
into a position in the house, it is a bringing of matter 
together with other matter. These illustrations might 
be multiplied ad infinitum. 

Enough has been shown to make clear the point that 
all process of production, both chemical and mechanical, 
consists of bringing and carrying of things, changing 
their position and relation to each other. This in chemistry 
extends from the cooking of a potato to the making of an 
ingot of steel, and in mechanics, from the peeling of a 
potato to the operation of a railroad train. 

The same principle holds true in every field of pro- 
duction engaged in by man. In agriculture, man sup- 
plements the work of nature in separating things and 
bringing things together. First, man only picked the 
fruit and nuts, gathered the grain and dug the roots 
for food. He learned in time that he got more and bet- 



CAPITAL — PRODUCTION 79 

ter fruit, nuts, grain and roots whenever the plants pro- 
ducing these things had freer access to nature's chemical 
stores. So he trimmed away surrounding foliage and 
pulled up crowding weeds that absorbed the substances 
that his fruit, grain and root growing plants required, 
and loosened the surrounding soil. After a while he 
made clearings, tilled the soil, planted and transplanted 
the fruit, grain and roots, and kept the weeds out. He 
learned to add fertilizer to the soil. Then he learned 
to graft from one plant to another, acquired the secrets 
of crossing and pollenization, improving and diversify- 
ing the fruits, grains and roots. All this amounted to 
enhancing the effect of the operation of natural forces 
in separating certain things from the cultivated plants 
and in bringing other things, and more in quantity of 
them, to the plants cultivated, rendering them more 
fruitful, useful and desirable to man. In all of these acts 
man merely followed the laws of nature as he came to 
understand them. In removing and keeping the things 
not wanted away from the things wanted in the plant, 
and in enhancing the flow of and bringing the things 
wanted together in and to the plant life he supplemented 
the work of nature. Thus analyzed, we find that agri- 
culture is the carrying and bringing of things. That 
the agriculturist is dependent upon nature, and natural 
laws do not affect the principle. In the other opera- 
tions of man spoken of, he was also dependent upon na- 
ture and natural laws. In making the fire, cooking the 
dinner and casting the ingot, he was dependent upon 
the forces and laws of chemistry; in cutting up the tree 
into boards he was dependent upon the wedge in me- 
chanics, and in transporting the material he was depend- 
ent upon the wheel, another principle in mechanics. 

To say that nature herself makes the plant grow 
is no more argument in opposition than to say that the 



80 WHY THE CAPITALIST ? 

raftman or boatman did not bring his logs or cargo down 
the river, because the water in the river carried the raft 
or cargo, or because the current was sufficient to move it 
along and all the man did was to guide it safely down 
the stream; or that the woodman did not bring the log 
down the hill because he put to good use the law of 
gravitation; or that the smith did not make the horse 
shoe in bringing the different particles of iron into dif- 
ferent relative positions, because forsooth he first had 
the fire to heat the iron. It may in fact be said that 
in every thing that man does in bringing and carrying, 
he utilizes nature's forces and laws. In peeling a potato 
he uses nature's mechanical law found in the wedge 
by having that wedge made into a knife that enables him 
to cut the potato. 

In literature the same thing holds true. In writing 
this book I am bringing together different thoughts — 
and these are also things. Many of these have been 
brought together before. Some of them have not, per- 
haps, been brought together before in just tMs way. 
I am bringing them together to meet a want, as I be- 
lieve. That is my labor. I shall also, I hope, remove 
things erroneous, incumbering notions. If I succeed in 
my purpose, I shall succeed in removing things from 
the mind, things that obstruct and prevent clear and 
fruitful thinking on the subjects treated. The same 
holds true as to music and the stage, and all the fine arts. 
Every block of marble contains within it a beautiful 
statue. All of the sculptors art consists in separating the 
statue from the surplusage of marble. 

Every true educator brings things together for the 
mind of the student or apprentice. He also removes 
things that litter up the mind and obstruct healthful, 
productive mental or physical work. More than all, if he 
is in reality an educator, he cultivates or assists in culti- 



CAPITAL — PRODUCTION 



81 



vating the mind of his pupil or apprentice so that it 
will continue on throughout life to bring things, carry 
things, separate things, analyze things, combine things; 
producing health and comfort for the student or appren- 
tice, and untold benefit to others. And every benefit that 
the pupil or apprentice achieves or confers in after life is 
contributed to in a large measure by his teacher. 

The surgeon and the doctor of medicine bring and 
carry things in the practice of their profession. They 
eliminate the harmful and introduce the beneficial. This 
is true whether it be done with the knife, with medicine 
or with advice and instruction in hygiene and regimen. It 
is in principle the same as with the educator, or the boat- 
man. 

I have not attempted to enumerate all of the occupa- 
tions engaged in bringing things together or carrying 

them apart. 

The transporter is therefore also a producer of value 
in so far as he carries things from one place to another 
where needed to supply human needs. The merchant in 
so far as he distributes things to the persons requiring 
them is also a producer of value. This, however, does 
not mean that the mere transfer of the title of things 
by the merchant produce value. Far from it. The trans- 
fer of title does not produce any value whatever. That 
is merely incidental to the service of distribution under 
the present conditions of society. It is, however, made 
the means of taking profit. This is quite different from 
receiving in return for the service of distribution an 
equivalent of the value produced. 



CHAPTER VIII. 

CAPITAL. 

Capital Produces Nothing. How Value is "Used" in the 
Production of More Value. 

By the aid of the fiction created by the use of the 
word' "capital," the exploitation of the workers is con- 
cealed as in a cloud of dust. The name "capital" connotes 
a difference in values where there is none. It connotes 
a difference in attributes and qualities. This constitutes 
one of the basic falsities that underlie the conventional 
political economy of our time. 

Conventional economists say that capital and labor 
are both actively engaged in the production of value 
and that capital is entitled to compensation for its ser- 
vices just as labor is entitled to such compensation. Both 
these pretensions are unqualifiedly false. There should 
be no need to prove their falsity, for the burden of proof 
rests upon those who make the assertions. But instead 
of making any proof, they have always been content with 
naked repeated assertions supported by nothing but 
parade, prestige, and that show of responsibility that 
brute force gives to accumulations of wealth. 

Ordinarily it is difficult to prove a negative, but it is 
not difficult here. Since I dispute the right to use the 
word "capital" in this connection in the sense that it is 
employed, I shall decline to become enmeshed in its 
net of fiction by using it in this chapter, and shall 
discuss the naked subject of that value which enters into 
the production of more value. 

That value which is "used" in the creation of more 

82 



CAPITAL — PRODUCES NOTHING 83 

value, is simply transmitted and made to fuse with, or 
merge into the additional value subsequently created 
by human effort. This is true whether the value so 
''used" be contained in the raw material that enters into 
the new product, or whether it be contained in the ma- 
terial consumed in the process transmitting the value in 
the material consumed into the new product, or whether 
it be in tools, machinery and buildings that by use and 
wear have the value contained in them gradually trans- 
mitted into the new product. 

As labor created the first value, the discussion resolves 
itself into one concerning the method and sequence of 
labor. 

A goes into a forest, not yet appropriated by the mor- 
gan. His purpose is to fell and cut up a tree for fire- 
wood to sell. He clears away the underbrush about a 
tree so as to be able to work more advantageously. 
As between himself and the rest of human society, he 
by that labor creates and imparts to the land about the 
tree a value that is to be used in the production of more 
value. The value now newly created lies in the resulting 
advantage in being unimpeded in the work of chopping 
down the tree. Will any one contend that this advantage 
or value swings the axe against the tree? The advantage 
is a value only if it be transmitted into the firewood that 
is yet to be produced by further labor. If it be not so 
transmitted, then it was only speculative, and failed of 
fruition. If A, after clearing away the underbrush, 
concludes to spare the tree and turns his attention to 
other things, and no one else takes up and continues the 
work, then the value created in clearing away the un- 
derbrush disappears. The existence of the value in the 
clearing was conditional and dependent upon its being 
utilized by transmission into the wood of the tree by 
further labor. In this respect the value in the clearing 



84 WHY THE CAPITALIST ? 

occupies precisely the same position as the value in tools 
and machinery. 

Now, assume that A fells the tree. With every stroke 
of the axe he is creating value, beginning even with the 
first stroke. Each succeeding stroke adds more value 
to the value produced by the preceding strokes and 
brings the value created by them nearer and nearer to 
fruition. Without a first stroke there cannot be a sec- 
ond stroke; without the second there cannot be a third, 
and so on until the tree falls. Each stroke of the axe 
creates a value that is transmitted and merged into the 
greater value, simultaneously with the creation of more 
value by more labor. This constant transmission, merg- 
ing and shoving forward of the ever increasing value 
with and into the ever newly created value continues 
until the tree falls. Yet every particle of this value, that 
resulting from the first chop of the axe and that re- 
sulting from every succeeding blow, until the last one is 
given, is continuously dependent upon the labor subse- 
quently performed and to be performed to rescue it from 
evanishment; and this continues to be so until the tree 
is cut into lengths and split up into pieces of the required 
dimensions for firewood. Until then all value is contin- 
gent, depending upon the further expenditure of labor for 
its continuation and realization. All of the value as fast 
as it was created by each chop of the axe, constituted, 
according to conventional economists, the basis of and was 
"used in the production of more value" until the indi- 
vidual sticks of firewood lay in the pile. During this 
course of labor all of the value so long as it entered into 
further operations came strictly and fully within the 
classical definition of capital. 

When the tree is down, A lops off the encumbering 
small branches and foliage, thereby continuously creat- 
ing more value by his labor that as continuously goes 



CAPITAL — PRODUCES NOTHING 85 

into the prostrate tree. In doing this he steps up on 
the trunk of the tree and into the branches, using them 
instead of a step ladder, thus applying also as a tool in 
the creation of more value the value already created. 
Then A cuts the trunk and limbs into the desired lengths, 
and proceeds to split the wood into pieces of the thick- 
ness required for final use. In so doing this he finds that 
his work is facilitated by using a thick piece f Hom time 
to time to lean other pieces against. He thus can pro- 
duce more split wood in a like time than otherwise. 
These thick pieces so applied represent value and are ap- 
plied in the course of producing more value. 

Let us now vary the case a little. Suppose two 
men, A and B, both in need of firewood and both having 
the same right in this primeval forest, and both also 
owning axes, mauls and wedges, and both equally pro- 
ficient in felling trees and splitting wood. They select 
the tree together. On the first day of work B is other- 
wise engaged. A goes to the tree in the forest alone, 
clears the surrounding ground, fells the tree, lops the 
brush off and cuts the trunk into the lengths required, 
consuming the day in this work. The next day A has 
other work to do, and B goes into the forest alone. B 
splits the wood up in the same manner as in the first in- 
stance related, divides it into two piles of equal size, one 
for himself and one for A. He also consumes a whole 
day in this work. 

Now, supposing A claims that he should have more 
than an equal half for furnishing the capital. Suppose 
he says to B, "I did as much work as you did, for which 
I am entitled to as much as you, and besides that I fur- 
nished the capital without which you could not have 
produced such an amount of firewood. If I had not 
cleared away the underbrush and felled the tree first and 
cut it into lengths you could not have split it up, for it 



86 WHY THE CAPITALIST ? 

would have been impracticable and well nigh impossible 
for you to climb the standing tree and split it up; if I 
had not cut the trunk into lengths you would not have 
had large pieces to use from time to time as chopping 
blocks. That which I produced became the capital for 
you to work with and upon, and greatly enhanced th^ 
amount of value finally produced. My industry fur- 
nished the capital, that capital was mine and I am 
entitled to the benefit of what it produced when it was 
working together with you. Capital and labor must 
work together and in harmony. That cannot be if labor 
claims and takes all that is produced by their joint ef- 
forts. Capital must have its just compensation. There- 
fore, I will take the one pile for my labor of the first 
day and five-sixths of the other pile for the work of my 
capital on the second day. One-sixth of the second pile 
is all you need. The rest must be given to capital. Fair 
dealing demands it. Anything less would be unjust and 
unreasonable !" 

Now does A do anything less if he succeeds in be- 
fuddling B, than filch from B the results that flow 
from an orderly co-operation and method in felling the 
tree first instead of beginning at the top to cut it up whilst 
standing? 

Suppose A at the close of his first day, or at any 
time in the transaction, had sold out to C, would that 
make any difference in the nature of the transaction or 
the principle involved? The sale by A of his interest 
or labor at the close of the day to C, or the juggling of 
A's property or title in the value that he had produced 
from one to another or any number of "capitalists" 
could not by any possible legerdemain have breathed 
the breath of life into this value which C now calls 
capital or cause it to perform any work whatsoever. 

Take the case of tools already touched on but in- 



^ CAPITAL — PRODUCES NOTHING 87 

cidentally. The principle is exactly the same. A, having 
no tools, wants to fell trees in this forest. He finds a 
deposit of iron ore and also some lime stone, builds a 
crude little furnace, in it burns value containing fuel, 
makes an axe, gets a hickory stick, fits it into the axe, 
proceeds to fell trees and spHts up the wood, which he 
sells. The axe is called "capital." When A made the 
axe, he produced value. The conventional economist 
say that this value is used in the production of more 
value. That is a specious truth, pregnant with a far- 
reaching false implication. The conventional economists 
take the position that the value uses itself up in co- 
operation with labor in producing more value. If it be 
conceded for the purposes of the argument that the value 
is "used," then it is untrue that it uses itself, it is not 
active but entirely passive. And if we still concede that 
it is "used," then it is labor alone that does the using. 

But the truth of the matter is that the value is not 
used. Oinly the corporeal form is used, or changed. The 
value is not used or consumed. It is merely passed on 
by labor in the course of the creation of more value. 
When you turn an electric current into a perfect con- 
ductor, it is not being used by passing through the con- 
veyor, its use occurs only with its application to its final 
purpose. When you pour water from a pitcher into 
drinking glasses, you are not using the water, you are 
only passing it along, changing the vehicle or package, 
as it were. 

When A fells trees and chops them up he is by grada- 
tions transferring the previously created value contain- 
ed in the axe into the firewood, whilst he is at the same 
time creating more value. He continues doing so as 
long as he continues felling and chopping up trees with 
that axe. .When the axe is worn out all of the value 



88 WHY THE CAPITALIST ? 

that it contained will have been transmitted by grada- 
tions into the wood produced. 

Does it alter the principle that when A made the axe 
he made 99 other axes for 99 other poeple who rendered 
him an equivalent in value contained in other 
things for them? Or does it alter the principle that 
some other person made the axe for A whilst he was 
doing something else in return for the axe-maker, or 
that he gave in exchange value contained in some other 
thing? Or does it alter the principle in the least that in 
the exchange of the service of A for the service of the 
axe-maker a confusing medium called money entered 
into the transaction? I think not. 

An axe is simply and only a combination of mechan- 
ical powers, namely, the wedge and the lever. The axe 
is the wedge and the helve is the lever. Here then he 
has had heat, the wedge and the lever. Every step in 
the process, beginning with the digging of ore, that 
led to the final purpose of A to have the trees piled up 
in cordwood, was a necessary precedent to those fol- 
lowing; every succeeding step merely carried along the 
value previously created and embodied it in combina- 
tion with and in addition to the newly created value; 
none of the earlier steps could be of any ultimate 
useful purpose or benefit to man, or if ultimate value, 
unless followed up by the succeeding steps. The furnace 
was not of any use without the making of a fire nor the 
fire without the bringing of the iron ore nor the iron 
ore without the smelting, nor the smelting without the 
making of the axe, nor the axe without the making of 
the helve, nor that without the cutting up of the trees into 
fire wood, the final end and purpose of the series of 
actions. 

Many additional illustrations might be given. In 
building a wall we lay the first layer of stone at the 



^ CAPITAL — PRODUCES NOTHING 89 

bottom. That carries the succeeding layers, course after 
course. Each course constitutes value and is applied, 
''used" the conventional economists would say, in pro- 
ducing more value. You could not build the wall with- 
out the "assistance" of the first course. Therefore the 
first course should also be called ''capital," and ought to 
share in the pay for the upper courses. You cannot 
hem a handkerchief without applying the first stitch to 
produce the second and third, and so on and on. 

The preceding acts furnish a basis, their effect is trans- 
mitted and their value added to the succeeding acts. The 
succeeding acts, on the other hand, furnish a motive 
and purpose and give value to the preceding acts. It 
would be folly and a useless waste of energy to make 
axes if that work were not to be followed by further 
acts of production. To the claim that the more direct 
and intermediate result of the acts prior in time should 
be given an extra name "capital" and awarded an extra 
compensation to be paid out of the result of the subse- 
quent acts, it is a complete answer that the subsequent 
acts rescue the prior from futility, without tbe subse- 
quent acts, the results of the prior acts would never be 
realized. The results of the subsequent acts have as 
valid a claim to the higher consideration and as good a 
right to demand extra compensation or premium, over 
and above the pay for the workman's work. Such a 
claim is equally as valid as the other. Each neutralizes 
the other. 

It probably will surprise some to be told that the doc- 
trine of the superior right of the subsequent over the 
precedent has for a long time been and is still recognized 
and given validity in maritime law. But it is only to 
serve the interest of the morgans. In other words, when 
the interests of the "capitalist" are to be subserved by 
doing so the rule is that the precedent has rights above 



90 WHY THE CAPITALIST ? 

and loaded upon the subsequent, and when the interests 
of the ''capitalist" are to be subserved by reversing the 
rule, the rule is reversed and the subsequent is given a 
superiority over and loaded upon the precedent. This 
is found in maritime liens. There the last claims upon a 
vessel for supplies, repairs or services rendered the ves- 
sel to facilitate its use as an instrument of naviga- 
tion, impress upon it a maritime lien. These liens are 
given precedence in the inverse order of their crea- 
tion, the later ones being first recognized and the earlier 
ones taking whatever of value may be left. This rule 
rests upon the specious reasoning that it is in the inter- 
ests of the nation and navigation to pay those first who 
assist in preserving the property and furthering the mari- 
time enterprise for the benefit of the staler claims. But 
the real purpose is to let the ship owner evade liability 
if his unseaworthy and played-out hulk should go to 
the bottom of the sea. All claims of sailors for wages 
and other services rendered the ship-owning morgan, 
are enforceable against the vessel only and not against 
the owner. The proceedings to collect such claims are 
called proceedings in rem, that is, they are against the 
thing. If the thing goes down, the sailors' claims go 
down too. The morgan, however, gets the profits as 
long as the ship is useable. It is a case of "heads I win, 
tails you lose." 

What has been said of the axe and the wood-chopping 
enterprise applies to every other productive enterprise. 
The axe is a simple tool. Yet its production involves the 
application of the forces and laws of nature. The pro- 
duction and use of the axe are an application of the 
principles of mechanics found in any machine. The 
value contained in the most complicated and elaborate 
machine follows the same principle and is transferred 
into the final product by further labor. It is simply a 



CAPITAL — PRODUCES NOTHING 91 

pushing along, a transmission of value from one thing 
to another, like the pouring of cream from a pitcher into 
a dozen small cups. 

As to factory buildings, the principle is identical. 
They are erected for the purpose of ultimately produc- 
ing the things that are sent out of them, and they con- 
stantly depreciate as their value is being transmitted 
piece meal to the goods manufactured. If building and 
machinery remain idle, their purpose is not realized; 
they depreciate and go to waste. This value is fully 
dependent on further labor for its application and con- 
tinued existence. The laws of nature are constant and 
inexorable. Nothing is static. Everything is dynamic. 
Everything must move or be ground to dust. So with 
that property attached to and invested in material 
things, that property called value. It must be contin- 
uously in transmission from one material thing into an- 
other. It goes from the axe into the wood, from the 
plow into the grain, from the factory into the output, from 
the railroad into the goods transported. For this transmis- 
sion of value and its rescue from inevitable destruction, the 
morgan calling himself a "capitalist" is wholly dependent 
upon the willing hands and brain of the gentile worker who 
in the act of rescue and transmission of value creates ever 
more and more value. 

The principle is the same as to improvements upon 
land. The man who makes the improvements puts value 
into the land. He has thereby created value and has a 
right to demand an equivalent of that value from any 
one to whom he turns over the land. But his improve- 
ments do not themselves participate in the creation of 
any subsequent value. The value in the land is simply 
transmitted. The subsequent work of the worker adds 
more value to what was created before. 

The labor power that creates all value, preserves it, 



92 WHY THE CAPITALIST ? 

transmits it and enhances in preserving and transmit- 
ting, it by adding to it still more value. Hence labor 
power is the basis of all values. It is not embodied in 
any material thing outside of man himself. It springs 
from and is dependent upon life. Human life is depend- 
ent upon the sustenance contained in the free goods of 
nature, produced by natural forces, supplemented by the 
expenditure of human labor powder. Without its daily 
supply of this sustenance, life would soon end and with 
it the power to labor. The gentile of the first order by 
reason of the meagre dole called wages, which is just 
sufficient for him to live upon and produce, can accumu- 
late but very little of a reserve store of the means to buy 
of the free goods of nature and value imparted to them by 
labor. 

The means of existence are held by the morgan in 
large surplus quantities and they do not succumb nearly 
so fast to the ravages of nature as human life does. As 
this surplus will sustain life the morgan, so long as 
he can successfully maintain his claim to exclusive own- 
ership, can sit down and eat as much of it as he wants 
to and let the remainder go to waste, whilst the rest 
of humanity looks on until it perishes. 

When the morgan, wheth'er by initial industry, or by 
force or fraud, or by means of glass beads or bribery, or 
by this or that hocus pocus, produced or under color 
of law possessed himself of the result of the work which 
in the nature of things has to be performed first in the 
order of production, pasted the mystifying label "capital" 
upon it and insisted that the bulk, or any portion, of 
the subsequently added value be handed over to him as a 
condition that he permit the process of production to go 
on, he became an interceptor. Like the highwayman, 
he commands the road and calls upon all the rest of us 
to stand and deliver. But he is a lawful hig^hwayman. 



CAPITAL — PRODUCES NOTHING 93 

He, in fact, fnakes the law, and his law says that he may 
throw the wooden shoe into the machine and so stop 
production until his terms and conditions are accepted 
at discretion. In fact, he may do so whenever he likes. 
There we find the most frequent application of the idea 
of sabotage. Sabotage is to stop the mac'hine. It can 
make no difference if this stoppage be accomplished by 
drawing the fires from under the boilers or by throw- 
ing a sabot into the gearing, or by locking the mill gate. 



CHAPTER IX. 

THE EVALUATION OF CAPITAL AND RATING 

OF PROFITS. 

We have seen that all production consists of bringing 
and carrying things, changing the shape, position and 
relationship of substances to meet ever varying human 
wants and requirements. The morgan, by reason of hia 
power, exercised through his state, clubbing all gentiles 
away from the resources of nature, which he calls his 
property, as a matter of course obtains at the start com- 
plete control of all the things that have to be brought, 
carried, combined, separated or fashioned. He controls 
production. 

The morgan "capitalizes" this power, intermingling 
it with surplus value created by the unpaid labor of the 
gentile worker, calling it all "capital." He then attaches 
an arbitrary valuation to this "capital," based upon the 
extent of his power to wring out profits, in the way of 
more surplus value, from the unpaid labor of the gentile 
worker, and then he justifies his profit and the rate and 
extent of it by that same evaluation of his so-called cap- 
ital. 

The morgan, by exercising proprietary dominion over 
all the storehouse of nature, exercises a relentless pro- 
prietorship over all the things of nature that he can 
seize and that belong in the list of what I have been 
calling the free goods of nature. He thereby holds the 
power to dictate terms of life and conditions under which 
the gentile worker may do his work of supplementing 
the operations of nature and producing needed value to 
obtain his livelihood. The proprietorship also of the value 

94 



EVALUATION OF CAPITAL AND RATING OF PROFIT 95 

SO to be produced by the gentile worker has an attraction 
for the morgan, equal to the proprietorship of the resources 
of nature themselves which he already has. So he exer- 
cises the power he has and asserts ownership of all value 
added to "his" things by labor. The morgan is quite prone 
to take and devour all the value so produced. But to do 
so would stop any more value from coming into being, 
and that would be a calamity. 

The gentile of the first order is the goose that lays 
the golden eggs, and that operation could not continue 
unless allowance be made to keep the goose aUve and in 
laying condition. So the worker must receive the mini- 
mum necessary for him to live according to his station 
in life, to replenish his labor power and continue his 
species. The morgan therefore allows the worker the 
minimum. But he allows it grudgingly. As a logical 
result and consequence of his proprietorship of every- 
thing that was in existence before production, the mor- 
gan in his own eyes is, and of right ought to be, the sole 
proprietor of all that follows. He instinctively feels that 
not a single atom has been added to what was already 
his, either actually or potentially. It never dawns upon 
him that the bringing and carrying of "his" matter by 
the working gentile, the bringing about of new combina- 
tions and forms, creates the value and is all that there 
is of real value. All this value is from the economic 
position and viewpoint of the morgan, merely incidental 
and secondary to what he regards as the real thing, the 
atoms that constituted and continue to constitute "his 
property." Therefore he, quite naturally, regards him- 
self as the lord and overmaster of this value also created 
by labor and imparted to existing matter. He cannot 
but think it a shameful and unpardonable mistake of na- 
ture that she made the gentile with insides that have to 
be filled some three times a day to keep the worker in 



96 WHY THE CAPITALIST ? 

working order, and gave to him other needs that have 
to be suppHed. The morgan's interests cannot reconcile 
themselves to nature's caprice that compels a compro- 
mise with the needs of the .gentile's life. So if we con- 
cede the morgan's proprietorship, we must also concede 
that it is quite proper and reasonable that the morgan as- 
sert the right to determine the measure of the minimum; 
we must concede to him the right to satisfy himself that 
the worker is honestly and in good faith living upon the 
very least that the worker can get along with ; we must 
concede that any longing on the part of the worker for 
a larger part of the value he creates brands him at once 
as a dishonest man at heart, and a rebel in spirit against 
the existing order; and we must also concede to the mor- 
gan the right to educate the worker, and tell the worker 
how and when and where he might cut down his living 
expenses, and how he should get away from high liv- 
ing "and the cost of high living." If the morgan owns 
everything, why then he is paying the fiddler and should 
have the right to choose the tune. Every man naturally 
feels that he should have the right to control and guide 
the things he is paying for. 

Now the worker is in this respect often "quite un- 
reasonable." He is often influenced by the middle of 
his insides, and such absurdities. He does not always 
let his head, stuffed with morgan-serving ideals, com- 
mandments and creeds, control his conduct. He often 
lets his feelings run away with his mind and when he 
does, he gets to be quite extreme in his unreasonable- 
ness. He presumes to have a word to say as to what 
the minimum of his allowance shall be. The morgan, 
of course, regards this as the maximum of audacity. 
Controversy ensues. The morgan, in the full conscious- 
ness of his property rights and overlordship, refuses as 
a matter of principle to concede any right to the pre- 



EVALUATION OF CAPITAL AND RATING OF PROFIT 97 

sumptious and arrogant gentile to interfere with his 
property rights.. The gentile pleads and offers to arbi- 
trate. But the morgan, strong in the justice of his 
superiority secured to him by church and state, "has 
nothing to arbitrate." 

If we concede the morgan's proprietorship, then we 
must condemn the worker as an unreasonable disturber 
of the natural order whenever he asks that the minimum 
be readjusted. Every time the worker demands the 
right to have a voice in the adjustment of the amount 
of the minimum that he shall receive, he is making a 
treasonable attack upon the morgan's sacred right of 
property. This is sedition, and sedition must be suppressed. 
The gentiles, however, greatly outnumber the morgans. 
Therefore, to hold sedition down, it is of the highest diplo- 
matic importance that a great show of right and justice on 
the side of the morgan be maintained. "The strongest is 
not strong enough to continue always master, unless he 
transforms his power into a right, and obedience into a 
duty." To remember this makes it easier to perpetuate the 
proprietorship. The morgan's intellectual police are there- 
fore brought into full requisition. It is their work here 
also to befuddle the gentile minds. So they give an ar- 
bitrary money term valuation to the proprietorship, and 
then preach and teach the right to continue taking interest 
and profit upon the basis of this valuation. Their exer- 
citation attaches an arbitrary money valuation to everything 
seizable in heaven, on earth and beneath the earth. 

So long as the gentiles can be clubbed away from or out 
of a free and independent use and enjoyment of anything, 
it is enough to make that thing go by the name of capital. 
Everything the proprietorship of which can be used to 
wring out profits, is appropriated and given the name of 
"capital" as well as an arbitrary valuation in terms of 
money. Then because it has this tag of money valuation 



98 WHY THE CAPITALIST? 

affixed, it must in morgan justice and fairness be unham- 
pered and unmolested in its right to continue taking profits 
for the further gratification of the morgan's greed. It is 
called "wealth." At one time cattle gave the name to 
wealth. A morgan's wealth was evaluated in heads — 
capita — of cattle. Thus we have the arbitrary name ''cap- 
ital" given to everything on which, and with which labor 
power can be expended in producing value ; and everything 
seizable and without which the gentile cannot live. 

All of the actual value resulting from the expenditure of 
labor power by the gentile therefore belongs to the morgan 
as a matter of course. He owned all the material in the 
first place and the value created by labor could not be 
lodged anywhere else than in that material. The gentile's 
working efforts have to be exerted upon something, other- 
wise they will be only grotesque gesticulations. It follows 
that as it was in the beginning, so it is now, and so it will 
be to-morrow, under morgan rule. The morgan owns all. 

Eternal vigilance is the price of the morgan's pro- 
prietorship, also of the subsequently created value. As the 
arrangement does not always set well on the gentile's neck, 
the mind of the gentile must be kept away from thoughts 
and suggestions that are dangerous to the profit idea result- 
ing from proprietorship, and his heart must be kept free 
from covetousness as to these profits. So the morgan's in- 
tellectual outfit here too gives a reassuring and virtuous 
sounding name to the resulting surplus value that the mor- 
gan riots in. 

When a thing gets a virtuous sounding name the thing 
is morgan right, for a time at least. Surplus value is said 
to be the compensation of capital and it is called "profit" — 
"legitimate profit." It is legitimate because it is baptized, 
recognized and legalized by the morgan's ever-servlent 
church and state. So there we have it, Capital and Profit ! 
These are the two pillars of the morgan's system of so- 



EVALUATION OF CAPITAL AND RATING OF PROFIT 99 

ciety, carrying between them the straight and taut cable 
line of morgan reason. This cable line by thong and ring 
holds in leash all the sage wisdom within reach of the mor- 
gan and his intellectual servitors. This wisdom, leashed to 
the ring on the line, imagines itself free, poor thing, be- 
cause like a spaniel it may disport itself running back and 
forth between the seemingly great and imposing pillars of 
Capital and Profit, taking its exercise and displaying its 
agility under the admiring gaze of the sometimes to it 
generous morgan. 

According to spaniel logic, nothing in all creation is log- 
ical or worthy of the least study or consideration that does 
not come within reach of the spaniel tied to the line be- 
tween the post of capital and the post of profit. Various 
names are used for these stakes. "Capital," "investment," 
"vested interests," "income producing property" are some 
of the names given to the one. "Interest," "profit," "re- 
turns," "compensation," "income," are some names given to 
the other. But it is all the same. The names, like the 
whole scheme of logic in support of the theory of capital 
and profit, are calculated only to becloud the issue. 

The argument to support the theory of profit-taking is 
based upon the claim of compensation for the capital "en- 
tering into and used in production," measured by the 
claimed "amount and value" of the capital. The amount of 
claimed value of this "capital," whether acquired by pur- 
chase or accretion, is based upon the volume of profit that 
the proprietorship of it will enable the proprietor to wring 
out of production. Or to put it into other and perhaps 
plainer words: The more profits the "capital" will ex- 
tract the greater "value" it has, and the greater the 
"value" the "capital" has, the more profits the owner of 
it is justified in demanding. The whole reasoning of the 
theory of "capital" consists in begging of the question. 
The morgan takes more profits because the "valuation" 



100 WHY THE CAPITALIST ? 

of the capital is greater; and the 'Valuation" of the cap- 
ital is greater because the morgan can take more profits 
by means of it. What a beautiful circle ! 

The amount of profits extracted is always justified by 
the amount of the capital ; and the "value" of the capi- 
tal is always justified by the amount of profits — surplus 
value — that it pulls out or is expected to extract. The 
morgan logic never leaves this charmed circle. It is, 
or pretends to be, utterly unable to sc3, hear or under- 
stand anything beyond. The spaniel does occasionally 
''smell a rat." Then he just howls and furiously runs 
along his restricted course from capital to profit, from 
profit to capital back and forth, again and again, snarl- 
ing and snapping at all who dissent from his canine 
course of reasoning. 

A large amount of real value, consisting of the unpaid 
for value created by labor, enters into that thing called 
capital. That real value is capable of being admeasured 
and its true basis and amount ascertained as already 
pointed out, but not by the morgan method. Alnd whilst 
that value furnishes the stock argument for that much 
ridden term "thrift," the measure of it does not in the 
slightest degree enter into the evaluation of "capital," 
or the rating of interest or profit, within the reasoning 
and special justification specially manufactured in the 
morgan colleges for gentile consumption. The price of 
the capital stock of any company is always determined by 
the amount of profits — surplus value — that the company 
is getting out of the gentile's labor, or gives promise of 
getting. That is the basis upon which one morgan sells 
it to another morgan. That is the whole basis of the 
evaluation. If the land, plant, patent, secret or outfit 
was bought at a cheap price, in view of the profits ob- 
tainable, then the investment was good, the cheaper the 
better. If very cheap, then it was "splendid," and you 



EVALUATION OF CAPITAL AND RATING OF PROFIT 101 

could not buy it for anything near what it cost, because 
it is worth more, it has more morgan-value. If the thing 
was bought at a dear price based on the profits ob- 
tainable, then the investment was a bad one, and if no 
profits at all are obtainable and there be no promise of 
profit, then the investment was a complete failure, the 
stock has no morgan-value, you cannot sell it unless you 
fool some one into buying a worthless thing. The most 
costly plant, tools and machinery that cannot be utilized 
to get surplus value are without worth and valueless in 
the morgan's world, except only as a scrap heap, and 
the land will likewise sink in its morgan-value to such 
a price as will be commensurate with the profits that it 
might yield in some other enterprise. 

As the amount of surplus value produced by the worker 
increases, the evaluation of the "capital" is increased, 
and much faster, at that, and the greater extraction of 
profits justified. A splendid illustration of this is given 
by the bulletin of the Department of Commerce and La- 
bor at Washington, based upon a compilation of the 
figures relating to manufactures, obtained by the Bureau 
of the Census for the period between 1849 and 1909. As 
the amount of surplus value per worker increased, the 
value set upon the capital kept on increasing as follows : 

Surplus Value "Value" of Capital 

Year, per Worker. per Each Worker 

1849 — $237,52 Factory, hand and neighborhood industries. .$ 557.13 
1859 — 362.51 Factory, hand and neighborhood industries.. 770.15 
1869 — ■ 377-14 Factory, hand and neighborhood industries.. 825.10 
1879 — 375.02 Factory, hand and neighborhood industries.. 1,021.10 
1889 — 545-48 Factory, hand and neighborhood industries.. 1,534.75 
1899 — 628.63 Factory, hand and neighborhood industries.. 1,849.52 

1899— 598.95 Factory 1,904-49 

1904— 673.55 Factory 2,317.86 

1909 — 771-30 Factory 2,785.96 

The census of 1910 also shows the movement in per- 



102 WHY THE CAPITALIST? 

centages. The increase in the amount of value added 
to material by manufacture from 1849 to 1859 was 84.1 
per cent and the increase in ''capital" is given as 89.4 
per cent. From 1859 to 1869 this increase in value added 
to the material 63.3 per cent and the increase in capi- 
tal 67.8 per cent; to 1879 these figures were again in-- 
creased to 41.4 and 64.7; to 1889 they were again in- 
creased to 113.4 and 133.8; to 1899 they were again in- 
creased to 34.3 and 50.4; to 1909 they were again in- 
creased to 76.6 and 105.3. 

Thus thte evaluation of the power to wring out sur- 
plus values is always expressed in figures well in ad- 
vance of the figures that express the increased value 
added to material by manufacture. Thus is sustained the 
"moral" argument of a "fair return for the capital in- 
vested." It is just the same as the evaluation of a piece 
of land. It keeps rising constantly in advance of and 
faster than the advantage to draw rent increases. 

From 1849 to 1859 the evaluation of capital, so-called, 
was increased six per cent more than the value added 
to material by manufacture increased; to 1869, seven per 
cent more; to 1879, 56 per cent more; to 1889, 17 per 
cent more; to 1899, 47 per cent more; to 1909, 37 per cent 
more. 

It is true that the number of establishments increased 
also. It is also true however that a factory is constantly 
deteriorating in value, because the value is constantly 
going out, as we have seen, into the product of the fac- 
tory. Of this the census gives us no figures. 

Assume for the purpose of further illustration that a 
worker produces 100 units of value per week and needs 
25 units of value per week to live upon and work. The 
morgan allows the worker the 25 units he needs must 
have. The remaining 75 units constitute surplus value. 
The morgan takes this and calls it interest or profit or 



EVALUATION OF CAPITAL AND RATING OF PROFIT 103 

compensation for the so-called service rendered by his 
power to intercept which he calls capital. Such an enter- 
prise, of course, is a "money maker" and if one morgan 
wishes to buy it from another he will be required to pay 
a price commensurate with the "money making" power 
of the enterprise. The morgan selling it will charge as 
high a price as he can get and in the morgan sense that 
is and will be the value or amount of "capital" in it. 
If 15 per cent be regarded as a fair return or compensa- 
tion then the "capital" producing 75 units of surplus 
value per week or 3900 units per annum net, will be 
said to be worth 26,00-0 units. That is the morgan- 
value of it. If the surplus-producing or profit-bringing 
power doubles, then the morgan-value or amount of 
the "capital" will at least double also. It will be said to 
be worth 52,000 units, or more. If the surplus — or 
profit-making power decreases or passes away then the 
morgan-value, or amount of "capital" also decreases or 
passes away. The plant becomes junk when it produces 
no more profit. 

By increasing the morgan-value of the "capital" com- 
mensurate with the profit-begetting property of the en- 
terprise, the profit or compensation for the "use" of the 
"capital" is always kept upon what in morgan morals 
and ethics is called a "fair basis." It is like the politician's 
trick of keeping tax rates down by raising the valuation. 
But this game of the politician is puny in comparison. 



CHAPTER X. 

EXPLOITATION. 

All of the ramifications of the morgan as an ex- 
ploiter are merely ramifications, never varying a par- 
ticle in principle. The prime object and purpose of all 
his ''brain work" has always been to exact rent and interest 
from all the gentiles, and to abstract the surplus produced by 
the gentile of the first order, the worker. During the early 
ages of the morgan's civilization this surplus was small, com- 
paratively. The chattel slave and the serf could not produce 
so much over their keep as the modern ''hand" producers. 
Therefore in the days of chattel slavery and feudalism there 
was not so great an accumulation of the surplus value. 

As we look back chattel slavery and feudalism appear 
to us in all their bald hideousness because to us there 
was no adulteration and no sham palliation of the brutal 
proprietorship of men and lands, and with it proprietor- 
ship of the results of industry. The morgans of those 
days are not and cannot now be paraded before us 
decked with false feathers. They are not held up to us 
of a later age as men of industry, thrift, superior intelli- 
gence or frugality, holding their fortunes by virtue of 
hard work and strict attention to business. 

The morgans of old did not pretend to be workers by 
falsely calling themselves farmers or manufacturers or 
builders whilst they were only jugglers of natural re- 
sources and surplus values. Their pride of birth and 
social position did not permit of their parading as farm- 
ers or manufacturers. That to their mind was degrad- 
ing. Though my process of reasoning is far dififerent 
from theirs, I arrive at the same conclusion. It was 

104 



EXPLOITATION 



105 



degrading. I cannot imagine anything more degrading 
than a false pretence that merely covers up spoliation. 
The modern industrial morgans are like many rich and 
therefore "respectable" ladies that have china painting 
done by artists whilst they themselves sit by and chat- 
ter, then brazenly have their names burned into the work 
and hand it out to the uninitiated as the production of 
their own "wonderful" talent. 

The morgan in industry produces absolutely nothing. 
If a man gives his personal attention and service in some 
way to his own business so as to contribute by that per- 
sonal attention and service to the value produced by hu- 
man labor, then only, and to that extent only, is he not 
a morgan but a gentile. And he is entitled to the full 
amount of the value that he produces. But to the extent 
that he draws profits to himself, he is a morgan. 

The morgan to the extent that he is a morgan loafs 
around, talks big, looks wise, puts his name or mark 
upon the value that the gentile produces and bags the 
surplus value, calling it interest, profits or compensation. 
His bag has grown enormously large. We shall now 
trace the progress of that growth. 

At the inception of the morgan's reign the surplus of 
values was small, comparatively, because the chattel 
slave and the serf could not produce so much over their 
keeping and there was not so great an accumulation of 
man-wrought wealth as now. The handcraftsman de- 
veloped rapidly with -the abolition of feudalism and chat- 
tel slavery. The handicraftsman was to an extent the 
proud owner of his own skill and besides that owned the 
tools that he worked with. He produced somewhat 
more of value than did the chattel slave or serf. There 
was very little of the morgan's "capital" that was or 
could be expressed in value. The morgan owned the 
land and thereby the raw material and the hut that the 



106 WHY THE CAPITALIST? 

handicraftsman lived in. For this the handicraftsman 
paid tribute out of the value that his labor produced. 
Outside of the comparatively small revenue that went 
to the morgan landlord, either in kind, in labor or in 
money, the gentile retained v^hat he produced, simply 
because there was not enough, of it for the morgan to 
take as exploiter without starving out the handicrafts- 
man and so losing even that which he was yielding, or 
driving him into rebellion. 

In time there appeared in embryo, the exploiter of the 
worker, the taker of surplus value. In course of time the 
exploiters who survived the destructive war of sinuous 
competition grew into the morgan type of exploiters. 
At first there apeared tKe master handicraftsman, em- 
ploying a number of journeymen handicraftsmen. By 
exploiting them he "made" little more than compensa- 
tion for assembling raw material and marketing product. 
The master would get a profit consisting of say twenty 
per cent of the value produced by a small number of men. 
There is no data available as to the true amount and 
these figures are given merely as a starting point and 
to show the process rather than the proportion. 

The master handicraftsman had to and did work along 
himself and in that way got his livelihood. Then came 
the development of the master handicrafstman into the 
manufacturer along with the development of the group- 
ing of hand-workers, or manufacturing method. This 
method consisted of the co-operation of a number of 
workers to produce given results. The work was divided 
and sub-divided, each worker becoming more efficient 
in performing certain parts of the work of production. 
The less skillful parts of the work were performed, and 
performed just as well, by the less skillful hands of those 
whose station in life demanded for them less to live 
upon that the more skillful. It opened more and more 



EXPLOITATION 107 

Opportunities for utilizing the labor of women and chil- 
dren. Thus the volume of output per worker was en- 
hanced without enhancing the amount the worker re- 
ceived of the value he produced. It merely increased 
the surplus of value for the master, now developing along 
toward morgan dimensions. 

The next stage of industrial development following the 
manufactory stage was the mill or machine-factory stage 
under which we are now^ living. The introduction of 
labor-saving machinery and large organization of indus- 
try worked a most complete and marvelous revolution 
in the method of applying human labor to the production 
of value, and enormously increased still further the 
productivity of human labor, and requisitioned more 
and ever more of the women and children to serve in 
the growing and wearying drudge of productive factory 
work. The highly skilled mechanic now disappears. The 
cunning of the craftsman's hand becomes a drug upon the 
market. It is rendered superfluous by machinery and 
improved methods. The machine tender is ushered in 
to wear his life away, watching and directing tools now 
clutched in the untiring grip of power driven machinery. 
The machine tender himself becomes as it were a part of 
the machine. Special skill and good muscle are displaced 
by lathe and jenny, and a thousand other contrivances 
equipped with belt, pulley and motor, attended by stunted 
men and emaciated women and children. The so-called 
blessings of civilization are not for these children of the 
race. On the contrary, all of these expropriated gentiles 
are permitted to be upon the earth only to be exploited 
by the morgan, now also in the guise of manufacturer, 
mine operator, etc., etc., "employing labor," and so to 
advance the morgan's blessed civilization for the glory 
of the morgan. 

This is the course of all productive industry, whether 



108 WHY THE CAPITALIST ? 

in the factory, in the mine, on the farm, or elsewhere. 
Everywhere the press and drive is toward production on 
a large scale, crushing out the smaller master handi- 
craftsman or manufacturer by improved methods and 
greater scope and power. There is no longer any hum 
of industry. All is soot and smoke and glare, screach 
and clatter, producing a deafening roar and rush of wealth 
to the bursting stores of the morgan. 

Under the earlier forms of exploitation the amassing 
of wealth was comparatively slow. The reasons were 
quite natural. Human productive efficiency was low in 
comparison to what it became in later times and the 
early tools of production were simpler. Then the life 
of the average individual counted for more in production. 
The handicraftsman in importance was above the tools 
and owned the tools that he worked with. He received 
a larger share or proportion of the value that he pro- 
duced. Or, to put it in another way, he did not produce 
so much more than he needed to live. If the developing 
morgan exploiter pressed down a little too hard upon 
him or if he felt it irksome to be under any pressure at 
all, it did not require so great an effort to start in busi- 
ness for himself and in a little while perhaps become an 
embryo exploiting morgan. 

The early exploiter was not wholly exploiting. He 
was part worker. If he had ten workers under him the 
aggregate of the surplus from their labor was not suf- 
ficient to support him in idle luxuriousness. If the ex- 
ploiter got from ten workers as much as one-fifth of the 
value they produced, each one producing 100 units of 
value per week, it would give him in the aggregate an 
amount equal to that produced by two workers, say 
200 units of value per week. 

Though the exploiter was frugal and could live com- 
fortably for his time on this booty, he was not and could 



EXPLOITATION 109 

not be satisfied. His cupidity did not permit of it, and 
without cupidity he could not have been an exploiter. 
So he worked also and by his work produced as much 
value as he needed for his keep. The 200 units surplus 
per week that he ''made" on his workmen accumulated. 
In a year of say 52 productive weeks, the exploiter had 
a snug 10,400 units of surplus value. His workers had 
nothing of the surplus value they had created. What 
if some of them did draw heavier on their health and 
strength and pinched from their lives a little accumula- 
tion of value units? That did not give them and does 
not now give to any of those who try it any of the sur- 
plus they created or now create. It does not get them 
into the game of profit filching. Those who get into the 
game from time to time get in by reason of their craft 
and daring, called "business ability." Their little savings 
only supply the jimmy. Fully many more get the jimmy 
itself by exercise of that self same craft and daring. 

How stupid to starve and pinch to get the jimmy, 
when, if you have the "talent" for putting up a strong 
front, winning confidence, borrowing on your own face 
and note, kiting, flimflamming and sharp turning, you 
can get your jimmy in a much more genteel way! It 
furnishes a most wonderful stimulus, besides, to the self 
assurance and brass called business enterprise. That 
self assurance and brass is worth even more than the 
jimmy. It is worth more than gold. The ordinary 
clod-hopper cannot see or understand it, for it is under 
a cloak, and he is so impressed that he regards the 
"talented gentlemen" almost as a god. This is worth 
much more than the jimmy itself to the man that has it. 
The morgan's intellectual outfit point to the brilliant 
examples and preach at all the gentile mass to go and 
do likewise, and shout that all will win success if they 
only try hard enough. They do not attempt to tell us 



110 WHY THE CAPITALIST? 

who will be the workers if all should succeed in becom- 
ing exploiters, nor do they expect us to reflect upon the 
conditions of life possible in a society such as their ideal 
of business suggests. Wouldn't it be fine to live in a 
community where everybody got his livelihood by the 
complaisant pursuit of burglary? What possible dif- 
ference can there be between burglarizing one another's 
houses for one another's goods, and exploiting one an- 
other for one another's goods ? 

If the implication of turpitude is confusing or disturb- 
ing, let us take a perfectly moral illustration. How 
beautiful it would be if we all would make our liveli- 
hood by taking in washing from one another, or if we all 
got our living in Jerusalem by peddling matches to each 
other. According to the sophistry of the morgan's school 
if everybody in a foot race would only run fast enough, 
everybody would win the big stake. 

The self-complaisant intellectuals of the morgan's out- 
fit, when thus smoked out say that all men are not alike 
nor equally endowed, that only the few best and fittest 
can win, and that the many must fail. Then they have 
the brazenness to assert that their successful jimmy men 
are the few best and fittest, the upper classes, the most 
competent, and that they ought to have, as they do, the 
cream and fine bread, and that th^ great mass of human 
kind who have no predilection for jimmy work are the 
inferior, the lower classes, that have to be, and of right 
ought to be, content to live on a short allowance of in- 
ferior skim milk and husks. They exalt and extol the 
meanest and degrade and stigmatize the noblest of the 
human race. They prate wisely of the inexorable law 
that decrees the survival of the fittest, assuming that 
that society is the best where bestial characters are best 
developed and prove the fittest. Their opposition to any 
change of this form of society is based principally on 



EXPLOITATION 111 

the very claim that this is the best sort of society to de- 
velop the character that is most fit to survive in it. 

It would be as legitimate an argument to say that 
putrid carrion is the best sort of place to develop the 
maggot and that, ergo, the maggot is the fittest creature 
in that sort of an environment, because he survives. 
Therefore, in the namie of all that is holy, do not remove 
the carrion, do not abolish the conditions that produce 
the creature most fit to survive under those conditions, 
no matter how vile the creature or how vile the condi- 
tions. 

The more the exploiting appetite is fed, the more rave- 
nous it grows. When the little morgan exploiter be- 
holds his accumulation of 10,400 units of surplus value 
accumulated from the workers in one year, he looks 
about for opportunities to expand. He will get 20, or 30, 
or 40 workers, accept and apply suggestions for re-ar- 
ranging and reorganizing the methods of production, 
all with the one sacred purpose of increasing the amount 
of surplus value produced in gross and per capita. New 
schemes, devices and machines, the product of gentile 
minds, as fast as proved of advantage to the morgan, are 
accepted and introduced, further and further increasing 
the output of surplus value. So the machine, which is 
simply a development of tools and methods, brings in 
the factory and factory methods of production. It is of 
no diflference whether the machine is operated within a 
large building, or in a large mine, or on a large farm. 
It all constitutes the factory method of production. This 
means a much larger amount produced per person em- 
ployed. 

The Appeal to Reason's Arsenal of Facts for 1912, by 
Fred D. Warren says on page 66 : 

'The following table is compiled from the 13th Annual Labor 
Report, which present? in detail the results of an investigation by 



112 WHY THE CAPITALIST? 

the United States Labor Commissioner, showing the difference in 
the time required to produce a certain number of units of man- 
ufacture by the hand process and by the machine process. The 
report is out of print. This table is valuable and should be pre- 
served. With it you can discover at a glance the difference in 
the two methods, and you will begin to understand why the owners 
of the machines wax rich while the worker struggles to live. For 
instance, under the old hand method it required ii8 hours to make 
one landslide plow. Today, with modern machinery, it requires 
less than four hours. The worker to-day produces 30 plows in 
the same length of time it formerly required to make one plow. 
If he worked in the good old days for $1 per day, it cost his boss 
about $11 in wages. To-day he gets $2 per day and in eleven days 
gets $22 in wages. For this outlay on the part of the capitalist 
he gets 30 plows. In other words, the capitalist doubles the wage 
fund and increases his wealth 30 times — or, assuming that plows 
have decreased one-half in price, he still has wealth 15 times greater 
than did his predecessor. The laborer gets for his $2 to-day just 
what his father got for $1 — 'his board and keep.' Go down the list 
and you will grasp the signifiance of the figures and will know the 

secret of capitalist accummulation : 

— Hours — 
Hand Machine 
Method. Method. 

Pitchforks — 50 pitchforks, 12-inch tines 200 12 

Plows — I landslide plow, oak beams and handles.. 118 3 

Bags — 5,000 cotton flour sacks 137 28 

Bookbinding — 500 12 mo. books, 32 pages, full 

cloth 228 59 

Shoes — ID pairs men's fine grade, calf, welt, lace 

shoes, single soles, soft box toes 222 29 

Boxes — 1,000 strawboard, paper-covered shoe boxes, 

11^x6x3^ in 228 34 

Crackers — 1,000 lbs. graham crackers, packed 160 35 

Carpet — 200 yards ingrain carpet, cotton warp, wool 

filling, 1,088 ends, 26 picks per inch 151 64 

Carriage — i eliptic spring, leather top buggy, piano 
body, dropped axles, banded hubs, cloth trim- 
mings 200 39 

Watch cases — 10 gold hunting watch cases, 18 size, 

engine turned, "Barleycorn shield" pattern 174 35 

Watch movements — i key-wind, brass hunting watch 

movement, 18 size, full plate 195 5 



EXPLOITATION 113 

— Hours — 
Hand Machine 
Method. Method. 

Combs— I gross horn dressing combs, 7x1^ inches, 

coarse and fine, teeth I ^ inches 66 12 

Barrels— 100 flour barrels, patent hoops 50 22 

Rope— 300 pounds ^-inch hemp baling rope I34 I7 

Corsets— I dozen medium sateen corsets, 17 eyelets 

in back 210 18 

Hatchets— 12 dozen No. 2 shingling hatchets, 22 

pounds per dozen • ^9i 54 

Firearms— I double-barreled, breech-loading, ham- 

merless shotgun 202 58 

Pamphlets— Printing and binding 4,000 pamphlets, 32 

pages, 3^x5^ inches 234 5 

Newspapers— Printing and folding 36,000 pages 216 I 

Lithography— Printing 1,000 sheets art work, 19x28 

inches, 6 colors 281 5 

Typesetting — 100,000 ems, newspaper work 209 45 

Envelopes— 50,000 No. 6U plain white envelopes... 217 15 

Butter — 500 pounds, in tubs 125 12 

Shirts— I dozen white muslin shirts, plaited linen 

bosoms, linen-covered collars and cuffs attached 119 15 
Lounges— 12 oak frame, round end, plush-covered 

lounges, 69x23 inches, antique finish 246 46 

Harness— I set double coach harness, traces, 10 

stitches per inch 234 40 

AGRICULTURE. 

Barley — 100 bushels 2X1 9 

Corn— so bushels, shelled, stalks, husks and blades 

cut into fodder 228 34 

Corn— so bushels, husked, stalks left in field 48 18 

Cotton— Seed cotton, 1,000 pounds 223 78 

Hay— Harvesting and baling 8 tons timothy 284 92 

Oats— 100 bushels 265 28 

Potatoes— 500 bushels • 247 86 

Rice — 10,000 pounds rough 235 04 

Rye— 100 bushels 251 100 

Strawberries— 500 quarts 216 84 

Sweet potatoes— 50 bushels iSi 58 

Tomatoes— 100 bushels 216 89 

Wheat— 50 bushels ^^0 7 



114 WHY THE CAPITALIST? 

MINING. 

— Hours — 
Hand Machine 
Method. Method. 
Coal — 50 tons bituminous 171 94 

TRANSPORTATION, ETC. 

Loading grain — Transferring 6,000 bushels wheat 

from storage bins or elevators to vessels 222 53 

Loading ore — Loading 100 tons iron ore on cars. . . . 200 2 

Unloading coal — Transferring 200 tons from canal 

boats to bins 400 feet distant 240 20 

Unloading cotton — Transferring 200 bales from ves- 
sel to dock 240 75 



4,749 1,019 
According to this comparison the factory method of 
production is about 4.66 as effective in the number of 
articles produced. But this by no means states all of the 
increase of efficiency in the production of surplus value. 
There are no statistics available to show the improved 
quality of the articles produced by reason of the greater 
accuracy of the machine. 

The improved factory methods have wrought changes 
equally great in the production of the raw material of 
which the enumerated articles are produced. And last, 
but by no means least, the schedule does not give us the 
slightest inkling of the number of hours of labor that 
have been transferred from better paid skilled male adult 
hands to cheaper unskilled male hands, or to the still 
cheaper hands of women and children. All of these 
things add measurably to the volume of surplus value, 
and surplus value is what the morgan exploiter is after, 
and what we are concerned about now. 

For the purpose of illustrating the workings of the 
morgan's system of exploitation I instanced that under 
the system of manufacture before the advent of ma- 
chinery, the exploiter would get 20 cut of every 100 
units of value produced by the worker, the worker get- 



EXPLOITATION 115 

ting only as much as he needed to keep him at work, 

namely, 80 units. This is a fair basis now for a further 
consideration of the effect of the development of fac- 
tory methods of production upon the relative conditions 
of the morgan exploiter and the gentile worker. 

The increase of the productiveness of the gentile's 
work is much more than 4.66 times 100 units, the first 
amount as I have pointed out, but I shall take it at that 
figure. So each worker produces 466 units of value per 
week. Or 1000 workers in a factory would produce 
466,000 units of value per week. The worker still gets 
no more per week than enough to keep him working, 
namely, 80 units, or 80,000 units for the 1000 workers. 
If it be claimed that the workers' standing has raised and 
therefore he must receive and does receive an advance 
according to his raised standard of life, I shall for the 
present answer that it is very evident that the excess 
over and above the 4.66-fold increase in his productive- 
ness of value much more than offsets any such claim. 
I shall also show in a later chapter that this claim has 
absolutely no basis in fact ; that the figures furnished by 
the United States Department of Commerce and Labor 
show that he gets actually less; that the apparent im- 
provement in his condition is a result only of his higher 
intelligence which enables him to get better results from 
a smaller allowance, and that even this increased intel- 
ligence is exploited by the morgan for more profit still. 

Therefore, the morgan under our plan of reasoning 
gets now of the value produced by the worker 386 units 
to every 80 units that the worker gets. Thus every 
1000 workers produce weekly 386,000 units of value which 
they do not get, but which constitute a surplus that the 
morgan abstracts under claim of ownership. These 
figures, of course, are only estimates and are given to 
show the system, rather than the exact proportion. 



116 WHY THE CAPITALIST ? 

The morgan is unable to consume any more than a 
small portion of the appalling accumulation of surplus 
values, despite his devastating appetite. The unused 
heap of value grows continuously with ever accelerating 
rapidity, and the great problem, and the only problem 
that can enter the wealth-besotten mind of the morgan 
and his ''intellectual horde", is the problem of how to 
dispose of this surplus value to the further glory of the 
morgan; how to trade it off so as to gain yet more 
surplus value by the trade. 

Here we have then the scramble for foreign markets. 
The surplus value that the gentile worker produces and 
is not permitted to have, the morgan of each country 
tries to ship abroad somewhere, even at lower prices, 
to get in return wines, gems, paintings, statuary, titles 
and coronets, or to acquire abroad still more of the 
natural resources, mines, railroads, factories, etc. This 
makes an army and navy necessary to "protect our inter- 
ests abroad and to extend our trade." 

The figures taken from the 13th census of the United 
States, Summary of Manufactures, though not at all 
sufficiently illustrative, is indicative of the constant in- 
crease in the volume of surplus acquired by the morgan 
from the work of the gentile of the first order. The 
figures given are of factory or wholesale prices, relating 
only to the juggle of the morgan, and do not in the 
slightest degree inform us of the purchasing power of 
the workers' wages in purchasing as he must from the 
morgan as retail merchant; yet here are the figures: In 
1899 there was added by the workers in the factory to 
raw material, value, stated at $4,831,076,000, for which 
the wages and salaries of employes amounted to $2,389,- 
132,000, leaving stated surplus at factory, $2,441,944,000. 
In 1904 the amount added in the factory to the raw ma- 
terial, as also expressed in money, was $6,293,695,000, for 



EXPLOITATION !!'<' 

which the wages and salaries of employes so expressed 
amounted to $3,184,874,000, leaving surplus at factory 
stated at $3,108,821,000. In 1909 the amount added in 
the factory, as expressed in money was $8,530,261,000, 
for which the wages and salaries of employes so ex- 
pressed amounted to $4,365,613,000, leaving surplus at 
factory stated at $4,164,648,000. The number of work- 
ers producing this wealth in 1899 was 4,712,763, in 1904 
they were 5,468,383, and in 1909 they were 6,615,046. 
This was not much if any over one-fifth of the persons 
engaged in or who were available for productive work. 

These figures do not by any means fairly represent 
either the amount or the proportion of the surplus value 
filched in the holy name of profit. They are the factory 
figures and not anything near the retail figures at which 
the worker gets what he needs from the morgan whose 
other face appears in the front and aspect of retail mer- 
chant after he, the morgan, has played his beating part 
in all the intermediate stages. All of the filchings of 
profit and percentages of these intermediate stages, as 
well as of factory rent, etc., are only the carving up of 
the surplus value and an apportioning of it among the 
divers branches or departments of the morgan's profit 
abstracting system. It is merely the elaborate book- 
keeping machinery in which the worker as such has no 
interest and by which he is not in the slightest degree 
effected, any more than that he is befuddled thereby. 
It might however be here stated that the true aggregate 
amount of surplus value annually filched cannot be stated 
without figures showing the retail price in the aggregate. 
These figures are not available. Oiur statistical system 
is as yet too imperfect. 

The Summary of Manufactures referred to says that 
the amount of value produced was added to previously 
produced value of raw material amounting in 1899 to 



118 WHY THE CAPITALIST? 

$6,575,851,000, in 1904 to $8,500,208,000 and in 1909 to 
$12,141,791,000. The value in this raw material was also 
the product of human labor, and all of it had in the same 
way been subject to the same abstraction of rent, interest 
and profit, the usual method of abstracting surplus value. 

We cannot expect to measure out the exploitation go- 
ing on in the morgan's labyrinth, and put it down in 
figures. Sufficient can however be extracted from the 
tangled mass so that no one can gainsay that it is mon- 
strous and enormous. 

The exploitation by means of the railroads in 1910, 
less taxes, amounted to $824,241,301. On June 14, 1912, 
the national banks held as clear accumulated profit, not 
paid to stockholders, over and above capital and deposits, 
$952,450,074.81, and the state banks, $271,373,944.18. 

The figures given from our national reports are only 
examples. The wearisome details as to the measurable 
extent of our exploitation expressed in money-terms are 
beyond the purpose of this work. I am concerned only 
with an examination of the motives, methods and prin- 
ciples that drive and guide the morgan ruler and owner 
of the earth and all things on and in the earth. There 
are many volumes of statistics and reports from which 
the dilligent plodder can get much corroboration. Suf- 
ficient be it here to say that the morgan's bag of surplus 
value has grown to appallingly huge proportions. 



CHAPTER XI. 

EXPLOITATION CONTINUED IN MERCHAN- 
DISING. 

The merchant presents a duality of character. When 
the merchant renders a service personally, he is to that 
extent a producer of value. In another, and more im- 
portant aspect, he is simply a continuation of the mor- 
gan as exploiter and profit taker. In so far as the mer- 
chant and his wage workers distribute or facilitate the 
distribution of useful things and enhance the usefulness 
of those things by removing them from the places and 
persons not wanting them to the places and persons 
that want them, they carry and fetch, combine and sepa- 
rate, and thereby and to that extent produce value in 
as true a sense as the carpenter or farmer produces 
value. For this service the man engaged in merchan- 
dising is naturally entitled to compensation. He has a 
right to as much value in return as he creates by his 
service of carrying and fetching. He must get the mini- 
mum that he needs to live upon in the performance of 
that service, and to rear his children. Oitherwise he will 
not carry and fetch. 

By far the principal part of the role of the merchant 
consists in profit taking. It is true that the net returns 
gotten by many merchants are meagre, scarcely afford- 
ing a comfortable livelihood ; and, as if to add insult to 
injury, they are not permitted to get those returns as 
compensation for services perform.ed, but are compelled 
to filch them as profits. It is the case of ordained dis- 
honesty being manyfold more laborious and less remune- 
rative than an honest method would be. But we cannot 

119 



120 WHY THE CAPITALIST? 

be honest under the system of society that prevails. 
To-day, as much as ever, Mercury is the god of the 
merchants as well as the god of the thieves. 

The profit-taking taint so permeates the whole of 
merchandising as to give color and flavor to it all. Mer- 
chandising is part of the morgan's machinery of exploi- 
tation. The culmination of the process is here reached. 

The measure and extent of the worker's exploitation 
is not capable of being stated or approximated until we 
get to the point where he receives his quota of goods for 
consumption. This is because the production of value 
in the goods does not cease until that point is reached. 

The last act of value production takes place when the 
commodity is delivered into the hands of the consumer, 
thereby ceasing to be a commodity and becoming merely 
goods. 

The process of producing value begins when the raw 
material is first taken from nature, and it continues until 
the created value contained in finished goods is delivered 
into the hands of the ultimate consumer. The length of 
time that the articles necessarily lie in storage or display, 
either in course of production or awaiting consumption, 
and the incidental labor in care and protection, so far as 
necessary, also forms part of the process of production; 
but so far as unnecessary and avoidable, such labor is 
merely wasted. Aside from the work necessarily ex- 
pended in the distribution of needed goods, the whole 
process of merchandising is an unnecessary process of 
juggling, in the scheme to get profits for the morgan 
under our present system of society. Necessarily, the 
extent of the filching cannot be even remotely appreci- 
ated until we arrive at the end of the process. Here we 
have the expression of the aggregated value produced 
under the morgan system, stated by the morgan in mor- 
gan money-terms. This expression is derived from and 



EXPLOITATION, CONTINUED IN MERCHANDISING 121 

is rooted in the amount of labor power expended by the 
gentile of the first order ; not however the relatively small 
amount of labor power expended in producing the amount 
of value now handed to the gentile in the final forms of 
his necessaries, but the amount of labor power sur- 
rendered by him, in his duress, to get the pennies now 
within his palm, to sustain himself and his progeny. 

Viewed as a seller, the worker sells his labor power 
at its actual cost. Viewed as a buyer he pays all that 
he has of labor power for his livelihood. His true posi- 
tion is that of buyer. Every gentile has to buy his liv- 
ing in the market of the morgan by whom he was ex- 
propriated; and, unlike the robin, who simply takes of 
the worms that nature provides for all robins, without 
any question as to his right, the gentile finds himself 
barred from his own store house by the morgan's prop- 
erty rights, so-called. He finds himself expropriated of 
all that is seizable of nature's free goods. So he has to 
buy that which nature supplies spontaneously, as well as 
the enhancement of it resulting from the work and learn- 
ing of his ancestors. All that he can offer in liquidation 
is his own labor power. The morgan learns that he can 
also reap a large profit from the use of the gentile's la- 
bor power if he can get all of it. So he sets that as the 
price. He takes from the gentile of the first order 
all of his labor power in payment for sufficient of the 
necessaries of life to generate this labor power again 
from day to day and to insure a continuous procession 
of gentiles to the morgan's workshop and market to 
meet the requirements of the morgan's trade and the 
demands of the morgan's whims. 

The gentile of the first order receives coin from the 
morgan as master of the job. He hands the coin back to 
the morgan as master of the supply magazine. This coin 
gives the money-equivalent and money-measure to the 



122 WHY THE CAPITALIST ? 

quantity toward which constantly gravitates the meas- 
ure of the amount of necessaries that the gentile must 
have to replenish his labor power and propagate and 
rear his kind. That fixes the point around which hover 
the expressions of the value measurements of necessar- 
ies. The amount that the gentile of the first order can 
get at the morgan's magazine for the contents of the pay 
envelope that he gets at the morgan's pay car or pay 
office, constitutes the true wages received by him for 
the expenditure of his labor power under the morgan's 
goad. That also gives the gauge of the money sum ex- 
pressing for the time the quantity of intermingled value 
and free goods of nature that all of the other gentiles of 
the second and third orders must strive, cheat, steal 
and struggle for, that they must obtain, by fair means or 
foul, to sustain themselves in life. 

To be sure, there is an interminable amount of con- 
troversy, and a deal of striking and even riot and mu-. 
tiny, but it is all in the struggle of the gentile to main- 
tain the status quo as against the downward press of 
the morgan. When the morgan gouges more of the 
surplus value by raising retail prices whether it be di- 
rectly, or whether it be indirectly, in sending up whole- 
sale prices, or driving up rents and land "values" or 
interest rates or what not, the worker of necessity re- 
taliates by demanding a larger money expression of his 
daily allowance. He really does not as a direct result 
of success in this effort get any more value than he got 
when the money expression of his allowance was smaller 
and the money expression of the price of the necessaries 
was also commensurately smaller. Whenever a revolt of 
the gentiles is successful, the resulting improvement is 
more apparent than real, and only of comparatively short 
duration. Under the morgan's pressure, the weight of 
values going to the worker is constantly diminishing to 



EXPLOITATION. CONTINUED IN MERCHANDISING 123 

a lower level. I say weight of values, and by that I do 
not mean the money expressions. The latter have been 
tending upward all the time throughout history, but that 
does not mean that values are thereby to the same extent 
permanently affected. When the money expression of 
values in everything is doubled, the volume of values and 
their relationship will be as they were before the money 
expressions were doubled. Money is the only present 
medium of an expression of value. When two dollars will 
buy only as much as one dollar formerly bought, then 
the two dollars do not in reality, represent any more 
value than the one dollar did formerly. If the name of 
a pint be changed to "quart" without changing the vol- 
ume it could only serve to confuse. So too if the twelve 
ounces in a pint were called fifteen ounces or ten ounces. 
It is merely changing names and designations. 

The goods handed back to the worker by the morgan 
through the intricacies of his trade are given back to 
the workers at their true value. The change of price is 
only a change in the name of the amount. Value is 
about the only thing that comes out true in the whole 
of the morgan's regime of chaos. 

The worker is required to work and does work for a 
wage representing just enough for him to live on, propa- 
gate and rear his kind. The necessaries of his life are 
handed to him at a price that takes from him all of the 
tags or money that represents his wages. If the ex- 
pression of his tags or money be hig^, as in newly de- 
veloping regions, then the price, o^r value expression 
of the things he needs tends to be high, and if the value 
expression of the things he needs be low, then the ex- 
pression of wages in tags or money will also tend to 
the same point. The reality of these things will then 
not sound so big although in truth the size of the reality 
has not changed. 



124 WHY THE CAPITALIST? 

The confusion in the popular mind on this question as 
to where the filching occurs, whether at the point of con- 
sumption or in production, is because our minds get 
twisted in passing through th.e morgan's labyrinth of 
trade. To use a nautical expression, we lose our bear- 
ings, we lose the points of the compass, and the ques- 
tion always is: Where did we get twisted? The market 
price is the true money expression of value in the things 
we need. This also is in full accord with the morgan's 
theory of value, namely, that the value of a thing is what- 
ever you can get for it. He gets all of the worker's 
labor power for the means of life he sells to him, the 
needs of the worker take all of his wages to get them. 
It is the last expression in money-terms of the value 
measure of things. Money terms are however merely a 
medium of expression; just as the money tags are not 
necessarily of value in themselves but supply the names 
of the measure of value as well as constitute a medium 
of exchange. The filching of the worker takes place in 
the process of production. He is always producing 
more than he gets. When his tag-money does not pro- 
cure enough for him to live upon, he knows that his 
only remedy under present conditions is to get more 
tag-money. Therefore the natural thing for him to do, 
in the morgan's state, is to strike for more tag-money. 
Whenever and wherever the worker needs less tag-money 
to get the necessaries of his life, the amount of his tag- 
money declines toward the level of the amount that he 
needs. This does not mean that his real wages are 
thereby favorably affected except in the transition pe- 
riods. His real wages consists of the purchasing power 
of his pay envelope. 

Though the cost of living determines the wages of the 
worker, it must be borne in mind that the amount of 
the worker's wages does not determine the price of the 



EXPLOITATION, CONTINUED IN MERCHANDISING 125 

commodity. Wages are sometimes referred to in hag- 
gling over the prices of commodities, but the fact is 
that commodities are always sold for as much as they 
will bring. It is therefore untrue that a raise in wages 
drives up the price of commodities. It is, on the con- 
trary, the rise in the price of commodities that drives 
the worker to demand more wages. The morgan continues 
to drive up the price of commodities and uses the raise in 
wages as a specious justification. 

Those who have an income fixed by law or by long- 
term contracts find it impossible to maintain their 
standard of living in the face of the rise in the price of 
commodities. Such are public servants, pensioners and 
those who live on interest from bonds, mortgages and 
such investments. 

It is not of the slightest concern to me whether or not 
any individual or set of individuals intended or intends 
the results that we witness on every hand. It is enough 
to know that such are the results produced by the mor- 
gan machinery of society and state. It is unnecessary 
and answers no purpose Whatever to attach any moral 
turpitude. It is the underlying social and economic 
forces that are important and determining. 

Production of value forms but a slight part of mer- 
chandising. The great end and aim of the morgan is to 
carry through to its conclusion the great game of filch- 
ing the surplus value. When the manufactured articles 
leaves the factory at a stated money valuation, that valu- 
ation is only tentative and to serve the morgan's pur- 
pose of trade. It is not for the worker, or to measure 
the amount of the value that he gets. It is not the 
measure at which value reaches the worker as consumer. 
The product is still under the control of the morgan to 
trade and juggle with for the purpose of getting a reali- 
zation of the surplus value. The necessary carrying, 



126 WHY THE CAPITALIST? 

handling and distributing to the worker as consumer of 
the product, of course, adds a little more value to the 
product, but the value so added, from the morgan's 
point of view is only incidental, and to him is not the 
inducement. The statements of the volume of value in 
the product at the factory gate must therefore be in- 
creased by from 400 to 500 per cent and over, before the 
true value-expression of the goods as they enter the 
hands of the worker, as consumer, can be arrived at. 
All of the value contained in the goods when finally sold 
is created by the chain of workers, including the worker 
employed by the morgan merchant in his retail store. 
The worker gets his meager portion of this value before 
the final statement of it in the price at the final "sale." 
He gets it in wages amounting on an average to not 
more than one-fifth of the value produced, and he gets 
the wages in confusing coin. 

A very potent factor in producing the mental confu- 
sion in the search for the place where the exploitation 
takes place, is the morgan's false theories with which 
he dominates men's minds. The morgan will not con- 
sider his profit as being identical with the surplus-value 
produced by labor. He scouts the idea that it is unpaid 
for surplus labor. He forgets the process of production 
in his process of exchanging title, in his juggle. He is 
of the opinion that more value is produced by exchang- 
ing the value contained in one thing for the value con- 
tained in other fhings. He computes the rate of his 
profit upon his evaluation of the machinery, tools, build- 
ings and raw material applied in the process of produc- 
tion. The morgan never thinks to compare the amount 
of his profits with the amount of value that the worker 
gets out of the product of bis work. 

The morgan assumes, as of course, that the matter 
of his getting the tools, buildings and raw material in 



EXPLOITATION, CONTINUED IN xMERCHANDISING 127 

exchange for a /arger or smaller consideration, his as- 
tuteness in dealing, bargaining and cheating, and his and 
his salesmen's ability to dispose of the finished product 
at more or less favorable terms of exchange, enters Into 
the production of profit. It never once enters the head 
of the morgan that his dealing and dickering as a buyer, 
as also his hawking and peddling of the free goods of 
nature containing and bearing the value created and im- 
parted by labor in most part unpaid for, and his great 
exercise of talent to get in exchange, the greatest possi- 
ble amount of other quantities of the free goods of na- 
ture, likewise containing and bearing value created and 
imparted by still more labor, also in most part unpaid 
for is all far afield, and does not in the slighest degree 
enter into the production of value. All of his haggling 
relates only to title, it does not otherwise relate to values 
in themselves. It has only to do with the mine and the 
thine of the loot. 

The morgan never once thinks that he could just as 
well be in a weighted sack at the bottom of the ocean 
for all that he ever produces of the values that he as- 
serts ownership over. It never dawns upon him that he 
merely operates, gambler fashion, with the values of others. 
So far as society is concerned, value comes into ex- 
istence so soon as one person makes a usefulness avail- 
able to another by placing it at his personal service; as 
soon as goods are placed in the hands of users, and not 
before. Therefore, aside from the producer, who can be 
the owner because the creator, the only person who can 
be the true and natural owner of value is the user, in 
other words, the consumer. 

Outside of the comparatively small amount that the 
morgan himself consumes he does not in a true sense 
become the owner of any of the values that he wields 
dominion over. The principles involved in this state- 



128 WHY THE CAPITALIST? 

ment were fully discussed in the chapter on property. 
The morgan cannot by any means make personal use of 
all the products that he controls, therefore as to him 
they do not constitute value at all. So far as deriving 
any personal use and benefit is concerned, the morgan 
might just as well own warehouses full of provisions on 
the planet of Mars. One morgan might just as well sell 
that sort of property to another, and juggle with it to 
his heart's content and until his profits in that business 
fill up, the credit side of his ledger. Yet there will not 
have been enough value produced or effected by the 
trade to feed a flea. But no harm will have been done 
in that case either. The Martians are protected by the 
space that lies between the morgan's armies and navies 
and their planet, and therefore will continue enjoying the 
meat and potatoes in those warehouses without ever 
troubling themselves about the morgan's speculative 
ownership. But on this planet things are quite differ- 
ent. Though the morgan could just as well be on the 
other planet, his church and his state entrench him in 
his claim to control the things he cannot own. His 
church preaches and his state clubs us all into a sub- 
mission to his claims and terms. 

Though the morgan by virtue of his domination over 
the resources of nature assumes like dominion over all 
of the results of the surplus expenditure of labor power, 
he is not the user of any but the very small part that he 
consumes personally. He is not and cannot in the na- 
ture of things be the owner of the residue. The product 
does not enter into any consideration of the social rela- 
tions or of human society, until it is delivered by the 
last worker to the consumer and until then does not con- 
stitute value. Therefore under the morgan's dominion 
and possession it is not and cannot be value, save in a 
tentative sense only. 



EXPLOITATION, CONTINUED IN MERCHANDISING 129 

Here it is suggested that the reader recall in this con- 
nection what was said of the nature of value in the 
chapter devoted to that subject. It must be remembered 
that three things must accrue and concur, namely, hu- 
man labor, usefulness and service to another as the user. 
These three necessary elements do not accrue or concur 
until the result of human labor is handed over to the 
user, that is, to the consumer. When the worker hands 
the result of his work over to the morgan, the latter does 
not take it to use, but to control it so as to get power 
over an equivalent of its value from the user. The final 
condition necessary to constitute value, service to the 
user, has not yet been achieved. The embodied efforts 
of the worker, crystalized labor, as it were, has not yet 
become value in the economic sense. The value is still 
inchoate. Though it may be nearer a culmination into 
accrued value than coal at the bottom of the sea or 
goods on another planet, and notwithstanding the po- 
tentialities, the difference in the situation is one of degree 
merely. In principle all of this embodied or crystalized 
labor, this inchoate value, might as well be at the bottom 
of the sea or on another planet. The morgan is not the 
user of that which he is holding. What can the possible 
difference be if the morgan has it on another planet or 
in his warehouse or on the wharf with his property 
mark on it, so long as he has the power to deny us all 
the right to use it. It surely cannot be of the slightest 
difference to the would be user. He is kept out of the 
use of it until the morgan has juggled with it as whole- 
saler and then juggled with it as retailer. The morgan 
has it within his power to destroy the goods. He holds 
them for the greatest price he can get for them. The 
greatest price the worker can pay is the sum of his 
allowance from the morgan for expended labor power. 
Now it does not and cannot make a particle of difference 



130 WHY THE CAPITALIST? 

if this allowance is expressed in copiper pennies, in paper 
money or in gold dollars, in checks on the bank or in 
store orders, except that if in one form, the worker may 
run around a little more than if in another form and 
im'agine himself freer. 

When the morgan gives the medium or tag-money to 
the worker, it is his intention to give to the worker his 
living wage, the amount necessary for him to have in 
order to live, replenish his labor power and continue 
his kind. That is the measure under the morgan's wage 
system, and that is where it always gravitates to. We 
lose sight of the drift, direction and goal because our 
minds are confused by the psychological twists that we 
get at every turn in the maze. We are beguiled by im- 
posing store fronts, showy displays, costly wastefulness, 
deceiving advertisements, false puffing, false naming, 
false measuring, false grading and false weighing of 
goods, the employment of swarms of miserably under- 
paid, mostly unnecessary, clerks, drawn from the over- 
stocked labor market and paraded in a show of pseudo- 
prosperity. All of this is done to make the grand im- 
pression. Clerks, trained in alluring smirks and bar- 
gain-counter buffoonery, keep the mind in such a whirl 
that it cannot grasp or appreciate that it makes no dif- 
ference how many profit-taking morgans and morgan 
contrivances there may seem to be or how many differ- 
ent morgan faces are presented, so far as the producer 
and the rest of mankind is concerned it is all one mor- 
gan, pursuing ever the same interest, actuated by the 
same motive — to get the surplus value for nothing. It 
is not a matter of persons. It is a play and conflict of 
interests. The interests of those who take without giv- 
ing in return are always identical so far as the de- 
spoiled are concerned. Therefore it is perfectly fair, and 
conduces much to clear reasoning to treat all the mor- 



EXPLOITATION^ CONTINUED IN MERCHANDISING 131 

gans as one morgan. It is all one system of society that 
he is operating. It is all just one profit-grinding mill. 
Society is all just one plant that belongs to the morgan, 
and is ruled by him. 

Suppose the morgan when he "paid" the worker for 
one day gave him an order on the depot of distribution 
for two pounds of beef, two quarts of potatoes, two 
pound loaves of bread, a pound of sugar, a peck of coal, 
a half pound of butter, an ounce of salt, two ounces of 
coffee, six eggs, a yard of cotton cloth, a spool of 
thread, a quart of apples, a pound of soap, a quart of 
milk and a pint of beer; and suppose, for the purpose 
of this illustration that these articles constituted all of 
the worker's daily needs, to live, replenish his labor 
power, propagate and rear his kind. We should here 
have his wage expressed directly and in kind. If qual- 
ity be also specified there would be no room or oppor- 
tunity for deception or confusion of opinion as to the 
nature of the transaction. If these articles contained 
in value say one-fifth of the amount that the worker 
produced in a day, no one would find it in the least 
difficult to understand that the exploitation of the 
worker took place in the process of production. 

It will be seen at once that the worker gives up to the 
morgan five times as much as he gets. Now if the mor- 
gan decided, for the sake of convenience, saving of la- 
bor in book-keeping, or for a show of liberality or of the 
worker's freedom, to give to the worker for each day 
of ten hours labor power expended, a piece of paper, 
or some copper or silver coin, calling it in the aggregate 
the sum of two dollars, and representing the same 
amount of value, namely the value produced by the ex- 
penditure of two hour's labor power, and if this sum 
of dollars gets for the worker at the morgan's store 
the same goods in quantity and quality that he got be- 



132 WHY THE CAPITALIST? 

fore, can any sane person say that by this piece of leg- 
erdemain the exploitation has been changed from the 
process of production to the point of consumption? The 
worker simply gets two units of value out of every ten 
that he produces. Whether he gets it in the very form 
that he produces it in, or gets it in store orders or gets 
it in copper pennies or silver coin or paper money, makes 
no difference in principle, leaving out of consideration 
any greater opportunity under one system than under 
another for cheating and befuddling. 

The object and purpose of the morgan's wage system 
is to exact from the worker an expenditure of the great- 
est possible amount of labor power in the production 
of value, and to give to him in return as much only as 
he needs to live upon, replenish his labor power, pro- 
pagate and rear his kind. The stuff that he gets, called 
money, is not in itself the value the worker gets. It is 
merely a medium. It is a general order on the store. 
But it is saturated with the vice of shiftiness. If, when 
the worker takes this morgan money of two dollars to 
the morgan store he, calls for the same above-enum- 
erated necessaries, the store keeper figures up : ''Beef, 
.70, potatoes .20, bread .20, sugar .10, coal .10, butter 
.20, salt .02, coffee .05, eggs .20, cotton cloth .10, thread 
.05, apples .05, soap .05, milk .08, beer .05, and says: 
"You are short fifteen cents," then the worker was 
simiply despoiled as worker to the additional amount 
of value now represented by 15 cents, and he must go 
on short rations until the balance is restored. He re- 
ceived that much less than the amount of value that he 
produced in two hours. He was simply filched ad- 
ditionally of that amount in the process of production. 
The principle cannot be changed by saying that "beef 
has gone up." 

Under the morgan system value is measured and 



EXPLOITATION, CONTINUED IN MERCHANDISING 133 

stated in terms of money. The evaluation is based upon 
the market price. That means that a thing is worth 
what you can get for it. The morgan fixes the price, 
or money equivalent, or money statement of the value 
contained in things at the end of the process of pro- 
duction, in his morganized society, namely, at the store 
where the user gets the product. The morgan there 
gets his statement of price and his evaluation of neces- 
saries accepted as an expression. That is then the name 
of the measure, for the time being, of the value that the 
worker has produced. The name is in figures and the 
figures are always changing. The morgan is constantly 
striving to press down the amount consumed by the 
worker by raising the figures at the store; and the 
worker as constantly strives to keep up to the line of 
his needs by demanding a corresponding enhancement 
of the figures in his pay envelope. Th,e morgan also 
sometimes reduces the amount in the pay envelope. So the 
worker may be hit from either side. 

If the reader will bear in mind the elements of value 
and will hold fast to the analysis of production, he will 
have no difiiculty in understanding that in our society 
the production of value begins with the taking of the 
raw material from nature, and does not cease until the 
goods are delivered into the hands of the consumer or 
user. All the accessories, contrivances and processes 
constitute one gigantic plant in which one worker does 
work that goes into the material furnished, which is 
then passed on to another worker for him to perform 
more work upon, that the process continues until the 
final product is delivered to the final consumer. There- 
fore no statement of the value of the product can be 
accepted or regarded as fixed or stable until the process 
is completed. * 

The difference between the amount that the aggre- 



134 WHY THE CAPITALIST? 

gated workers have produced in value, and the amount 
that they get is the amount of their exploitation. It 
makes no difference v^hether one morgan or a dozen 
intervene, or vv^hether the exploitation be cast up in 
kind, or in money, the measure of the exploitation is 
just the same. The exploitation is of the workers as 
producers of value. 

The whole scheme of exploitation may very well be 
likened to the Chinaman and the pelican. The pelican 
is a natural fisherman, and a most adept one at that. 
The Chinese capture this bird and place a ring around 
its neck fitting close enough to prevent the fish from 
passing down the pelican's throat. The pelican is tied 
to a rope long enough to allow of a sufficient area to 
operate in, and put to work. The Chinaman superin- 
tends the job, and takes care of the fish as fast as caught. 
The pelican's wages consists of the heads and entrails 
of the fish. He gets enough to keep him working and 
producing young pelicans so as to continue and possi- 
bly extend the business. 

There can hardly be any doubt that the pelican is ex- 
ploited as a w^orker. The exploitation is in the process 
of production. That which he produces is taken away 
from him by the man who has obtained the mastery 
over him and barred him out from a free access to the 
resources of nature. It certainly cannot make any dif- 
ference if the Chinese master has a thousand peHcans 
with dozens of superintendents and foremen to see that 
things go right. Nor can it make any difference if the 
interim between the catching of the fish by the pelican 
and the getting of his rations of offal be occupied by the 
attention of only one, ten or a hundred Chinamen. 
What if these do strut around calling themselves inde- 
pendent business men of superior brains? That does 
not change the process or the effect. 



EXPLOITATION^ CONTINUED IN MERCHANDISING 135 

Suppose the foreman that oversees the fishing opera- 
tions keeps a time account of each pelican, and a pa}^- 
master comes around once a week and gives each peli- 
can an envelope containing tags of metal or slips of 
paper with which the pelican has to go to any one of 
a number of places to get his allowance of fish heads 
and entrails. It cannot be of the slightest moment 
which Chinaman has the longest queue, whether it be 
the one that takes the fish out of the pelican's mouth, 
or the one that hands out the pelican's pay envelope 
or the one tbat gives to the pelican his final reward of 
fish heads and entrails. Nor does it matter what sort 
of book-keeping the Chinamen have, or if they have 
any. Nor does it matter which individual Chinaman 
is a creditor and which a debtor or what the mine or 
the thine of it all is. No juggle or shuffle or slight-of- 
hand can change the nature of the business or make it 
anything else than a chain of connecting, interdepend- 
ent, constituent doings that together form one insepar- 
able transaction. 

Legerdemain has and may for some time yet con- 
tinue to have the power to confuse the mind, but it can 
not change the inherent nature of the process or its re- 
sults. The whole purpose and the only purpose of the 
Chinaman in having the pelican to work for him is to 
get the fish that the pelican catches and is not permitted 
to eat. The exploitation of the pelican is therefore in 
the process of production. Suppose the astute China- 
man also undertakes to gouge from the pelican some of 
his needed allowance of fish heads and entrails, tells 
him that the price of these things has gone up ; and 
suppose the pelicans all go on strike for more tags and 
slips of paper in their pay envelopes. Then suppose 
the Chinese boss, called employer, tries to divide the 
responsibility for things being in such a condition and 



136 WHY THE CAPITALIST? 

tells the pelicans that he is not to blame for the high 
cost of living, and that it must be that they are living too 
high. 

Suppose the boss tells the striking pelicans that they 
are a stupid lot or anarchists, that they should take 
themselves away and go some where else, that he for- 
bids them from fishing in these waters because these 
waters are his private property. If the boss and the 
master or any number of them in this way own all the 
w^aters, because they can club all of the pelicans away 
from them, then it becomes merely a question of en- 
durance. It will be a question of how long the master 
can feel content to do without the fish, and how long 
the pelicans can do without tags for fish heads and en- 
trails. 

All of the vapid talk of business and business enter- 
prise serves and can serve only one end, and that is to 
Gover up and hide the process of exploitation. 



CHAPTER XII. 
VALUE, PRICE AN1D PROFIT. 

We have seen that all value is the result of the ex- 
penditure of labor power; that the cost of the labor 
power to the morgan is the cost of producing that labor 
power, namely, the amount of value and free goods of 
nature necessary to keep the worker in working condi- 
tion and to support his family; that if the worker pro- 
duces enough value in two hours to equal the dole called 
wages that he gets, all the rest that he produces in the 
remaining eight hours is surplus value and goes to the 
morgan as profits. That is equally true when through 
the organization and division of labor and the intro- 
duction of machinery and power, the productivity of hu- 
man effort is increased. All of the enhanced surplus 
goes to the morgan. Every time the machines are 
speeded up a little more, the morgan gets the benefit 
of the resulting increase in production. When, by im- 
proved methods and machinery, we shall arrive at that 
stage where the worker in one hour in each day pro- 
duces enough goods to provide for his and his family's 
keep, the only real benefit of the improvement under 
present economic conditions will be the benefit that the 
morgan gets in the shape of a still further enhance- 
ment of his pile of surplus value. 

The tangible, material thing in the form presented to" 
us after labor power has been expended upon it, is 
merely the container and vehicle of the value conveyed. 
The creation of value begins with the first human effort 
bringing forth the raw material. Every succeeding hu- 
man act performed upon that material to make it serve, 

137 



138 WHY THE CAPITALIST? 

or more available to, some human want adds more value 
even though that value be inchoate, or unrealized. This 
continues until the material in its final form is deliv- 
ered to the ultimate consumer. When the consumer 
receives the article, he pays or obligates himself to pay 
a stipulated price for it, except in case of gift, when the 
giver pays or binds himself to pay the price. This 
price at the end of an article's productive history is the 
agreed valuation, the expression in money terms of the 
quantity of value contained in the article. This expres- 
sion of the volume of value in terms of money is en- 
tirely artificial, as money itself is entirely artificial. 

A true and natural expression and measure of value 
would be based upon labor time. The amount of labor 
time expended in producing an article, from the first 
raw material until delivered to the consumer, is the 
true value of that article. An equivalent of labor time 
is therefore the true and natural price. It alone can 
express value truly. Whether this equivalent be rend- 
ered directly by the expenditure of the measured 
amount of labor time, or be paid in the form of some 
other article containing and conveying a like quantity 
of value resulting from the like amount of expended 
labor power, cannot make any difference in principle. 

The natural measure and basis of exchange is labor 
time for labor time. The difference between the value 
produced by skilled labor time and unskilled labor time 
does not militate against this just and natural prin- 
ciple. The difference is easily equated on the basis of 
simple unskilled labor time. Add to the time expended 
by the skilled worker a computed amount of additional 
time for the time expended in learning his trade, or 
acquiring his skill, and the much talked of difference 
between skilled labor and simple labor vanishes at once. 
We have to pay the boss plumber for the time con- 



VALUE, PRICE AND PROFIT 139 

sumed by the journeyman in the simple labor of coming 
to and returning from his job, as well as for the time 
consumed in skilled labor on the job. Learning a trade 
or a profession is the same in principle as going to the 
job. The acquiring of the skill is only the preliminary 
labor, the same as the making of the tool is preliminary 
labor. Only in the making of the tool the labor is di- 
vided under modern methods. 

Under our present system of society, the value in each 
article containing value, as it is finally delivered to the 
consumer is expressed in and measured by an artificial 
medium of exchange called money. The conventional 
economists say that money is gold, either in tangible 
form or in symbolical media, such as bills, bank notes, 
silver and copper coin. For the present, I will only 
say as to that assertion, that gold is also a commodity 
like all other subjects of barter and sale, and that it 
would not have become money unless it had required 
human effort to get it out of the ground; and that all 
of the value that gold contains is the result of the ex- 
penditure of human labor power, just as in other 
articles. 

The computation of the price of an article delivered 
in sale to the consumer is not based upon any consid- 
eration of the amount of value theretofore imparted to 
it. It is based entirely upon the business principle of 
getting as much in return for it as the buyer can be in- 
duced to pay. The aggregate of the amounts allowed 
to the series of workers for the values they produce ii> 
much less than the price paid by the consumer for the 
sum of their values. One or the other is false. Both cannot 
be rendered true by juggling the measure into money terms 
and forms. 

For the purpose of obtaining a much larger price 
from the consumer than was allowed to the worker for 



140 WHY THE CAPITALIST ? 

producing the value, a large portion of the value finally- 
realized is expended in advance of the final sale, in 
puffing, advertising and displaying the goods, and in a 
parade of business, all to impress consumers with an 
inflated idea of the desirability of the articles on sale 
and to induce the consumer to buy wastefully, to swell 
the profits. All of this expenditure to attract customers, 
pulling them from one store to another, lying to them, 
deceiving and befuddling them with bargain counter 
sales, etc., is nothing but waste. 

The following table of units will show how the dif- 
ference between the prices paid to the workers for the 
values they produce and the prices paid by the workers 
as consumer of these same values is made up, showing 
how amounts are gotten by the many-visaged person- 
age, the morgan, for an article sold at a valuation fin- 
ally agreed upon in the morgan's market under the mor- 
gan's domination : 

— Manufacture — Transpor- Merchan- 
Raw M. Stage 1 Stage 2 tation dizing. Total 

Worker 8 + 40 + 40 + 20 + 40 =rz 148 

Ground Rent 7 + 35 + 35 + 15 + 50 == 142 

Int. on Loans 5 -j- 25 + 25 + 15 + 25 = 95 

Profit 10 -j- 60 -j- 60 4- 30 + 75 = 235 

Advertising 1 -f 2 + 3 + 2 -\- 50 =z 58 

Waste Labor 2 -j- ID -j- 15 + 15 +200 = 242 

Selling price in units , 920 

Aggregate allowance to worker 148 

Aggregate of exploitation , 772 

There is no claim that these figures are accurate or 
e^^en relatively correct. No reliable figures are avail- 
able. These figures are my own, merely speculative and 
without authority. They are given only to show the 
operation of the system and the general relative re- 
sults. 

Nine hundred and twenty units is the price of the 
article sold. That is what it is prized at by the seller 



VALUE, PRICE AND PROFIT 141 

and buyer. They agree upon that. It cannot affect the 
result to express this evaluation in money. Money is 
worth only what it will buy, and owing to its constant 
fluctuation in buying power, its service in the present 
discussion cannot be satisfactory. If we should say 
that the 920 units are equivalent to $920.00 or $92.00 or 
$9.20, it could make no difference whatsoever, for then 
the amount the worker gets, namely, 148 units, would 
correspond, and would be either $148.00 or $14.80 or 
$1.48. 

The possible variation in figures expressing value in 
terms of money are so many and multifarious as to 
confuse the understanding, owing to the constant fluct- 
uation of the purchasing power of money under the 
present haphazard fixing of prices. 

This subject of money and its purchasing qualities 
and powers will be gone into more deeply in a subse- 
quent chapter on money. 

It is fair to assume, and we must assume that the 
admeasurement of 920 units, agreed to by the morgan 
as the seller, in fact imposed upon us and enforced by 
him in the operation of his system, and accepted by the 
gentile as buyer, is a fair and just evaluation and aver- 
age rate. The morgan at any rate cannot deny its fair- 
ness since he and his system have imposed and estab- 
lished it. Furthermore it serves only as an ultimate 
term and designation of the quantity of the value. It 
is only a name and one name or designation is as good 
as another here. If it operated at all to establish an un- 
fair rate under the morgan standard the purchaser could 
not continue buying according to it. He might do so 
once or twice, but he could not be doing so all of the 
time. A disturbance would surely result. The service 
or sustenance in the commodity must balance the 
amount of value contained in the designation 920 units. 



142 WHY THE CAPITALIST ? 

Cheating, of course, cannot be considered as affecting 
the general proposition. 

Here we have 148 units going to the gentile of the 
first order for the 920 units that he produced. The plan 
and method of the division and the waste of the spoils, 
are of not the slightest consequence to him. It is suf- 
ficient to know that he is exploited and that his ex- 
ploitation is a natural result of Ms expropriation. 

Nor would it shed any different light on the subject 
if we could by any sort of calculation determine how 
much tribute for the free goods of nature is exacted by 
the morgan in addition to the 772 units, purloined from 
the gentile's labor. The morgan has grabbed and mixed 
all and the whole of everything, so that such a compu- 
tation cannot be made. He has produced a situation 
of confusion, himself, and he cannot claim the right to 
profit from his own wrongdoing. 

The worker is an unwilling customer, driven into the 
morgan's market to buy his living. The means of that 
living amount to 148 units. The price at the time im- 
posed by the morgan upon the gentile worker for those 
148 units is 920 units. The gentile worker pays over the 
demanded 920 units in kind and In advance. He pays 
it in value-producing labor power. He then gets his 
return of 148 units in tickets or orders on the supply 
magazine to replenish his labor power and life. These 
tickets, or orders, are in a form called money. He is 
taught to accept readily the statement that this dis- 
guised dole represents all that his work is worth. When 
he comes to exchange this dole for true values and free 
goods of nature again, to live upon, he finds that he 
does not receive anything near like the quantity that he 
gave. Instead of getting 920 units, he gets only 148 
units. That is all, and that was all that his money 
wages ever in truth, represented. The conventional 



VALUE, PRICE AND PROFIT 143 

economist then tells him in mock-wisdom that the trou- 
ble is in the high cost of living. The morgan brutally 
tells him the trouble is in the cost of his high living. 
These two statements only vary in this : The first is the 
result of an immature and half-baked theory; the sec- 
ond is simply a brutal rebuff, calculated to depress and 
humiliate. They are equally false. 

For the purpose of furnishing concrete illustrations to 
interpret and illustrate a wide range of facts and experi- 
ences, let us indulge the following consideration: Un- 
der a merchandising system of distribution there could 
be two natural computations of the prices of goods in 
exchange or sale. Each, however, differs from the other. 
They begin at the opposite ends of the process. 

The one computation would give each producer of 
value the full equivalent of the number of units of labor 
performed by him, weighted on the basis of simple la- 
bor, and thus arrive at the price of the completed arti- 
cle in the consumer's hands, by multiplying the total of 
the units of simple labor by the standard measure of 
value of each unit. Here the standard for measuring 
value would be established at the beginning of the pro- 
cess of production, and would be advanced by multipli- 
cation. 

The other computation would be to begin with the 
standard of value fixed upon the goods at their price in 
the hands of the consumer, and then proceed by a di- 
vision of this aggregate final value, expressed by the 
selling price, giving to each worker the proportion of the 
realized price that the amount of labor units performed by 
him bears to the whole. 

Either computation, with the elimination of all waste 
incidental to the profit-taking system, would insure to 
each worker the full equivalent of the value produced by 
his labor. It would not be of any consequence how we 



144 WHY THE CAPITALIST? 

named or designated the unit of value or labor power 
under the one method, or how we named or designated 
the price that designates the aggregate realized value 
contained in the article in the hands of the final con- 
sumer under the second method. The whole problem 
v^ould be reduced to an arithmetical basis, either way. 

It is not urged that such a system would be practic- 
able under the morgan's system of society. It is quite 
likely that it would be wholly impracticable under th€ 
present regime. No system is possible now that ex- 
cludes profit taking. The morgan thrives on the lack of 
all system. He is consistent in pursuing one principle 
in his business and that is to beat the workers down to 
an acceptance of the lowest allowance for their labor 
power so that he might have the largest possible amount 
of surplus value. 

The labyrinth, of the morgan's business always has 
the same beginning and the same ending. It begins 
with the expropriation of all the gentiles, continues 
through its mazes in exploitation of the gentiles of the 
first order and emerges in unearned profits. 

The truth of the matter is that a robbery occurs in 
the process of production. The gentile of the first order, 
and wage worker, is in fact robbed in two capacities. 
First, he, in common with the other gentiles who do not 
work for wages, but manage by hook or by crook to get 
their livelihood in the exercise of some art or profession, 
or in a little struggling business, or as protectors of the 
morgan, in the capacity of his police, intellectual or 
otherwise, are robbed as gentiles. All these are expro- 
priated of their proportion of the free goods of nature, 
barred out from their share of nature's bounty, deprived 
of a participation in the wealth resulting from the learn- 
ing of and the improvements wrought by our ancestors 
jointly and in common. Then the gentile of the first 



VALUE, PRICE AND PROFIT 145 

order is also robbed in the capacity of wage worker. He 
is exploited by the morgan who claims to be furnish- 
ing him with an opportunity to buy his livelihood. As 
compensation for that pretended kindness, the morgan 
takes all that the gentile worker produces, over and 
above the bare amount necessary to buy that livelihood 
and the livelihood of his wife and children. It is like 
the dishonest tavern keeper who gets a man drunk and 
then robs him by keeping the change of big bills as the 
man makes further purchases. 

The old Dutch settlers in this country are given much 
credit in our school histories for their honesty in treat- 
ing with the Indians. It was not honesty at all. It was 
simply craft and business cunning. The Dutch bought 
Manhattan Island from the Indians for about what is 
called twenty-eight dollars worth of cheap tinsel and 
jewelry. The Indian had not the slightest idea of busi- 
ness. Neither Indian ethics nor Indian society had de- 
veloped to that stage. The gewgaws carried the same 
sort of confusion to the Indian mind that the money 
juggle carries to the mind of the ordinary white gentile 
to-day. 

We are told that the honest Dutch trader bought fur 
pelts from the Indians by weight. The Dutchman used 
two beamscales in his business, a hand scale and a foot 
scale. In using the hand scale, the Indian's bundle of 
furs was placed into one pan and the Dutchman's hand 
into the other. When the scales balanced, the Indian's 
furs were said to weigh and were acquitted for as one 
pound. The foot scales were used in the larger tran- 
sactions. The Indian's load of furs was placed in the 
one pan of the scale and the standing Dutchman's foot 
in the other, and when these scales balanced, the load 
of furs was said to amount to four pounds, and was ac- 
quitted for accordingly. None of these Dutchmen were 



146 WHY THE CAPITALIST ? 

lightweights. All payments were made in store goods. 
The Indian never knew how much the measure of the 
value in any of his furs was. The measure of their ulti- 
mate value was arrived at when the furs were sold to 
the final consumer. But the Indian was none the less 
robbed at the point of production. As another illustra- 
tion: Johnny said to Jimmy, *' Let's play Sunday 
school." Jimmy said, *'A11 right. How do you play it?" 
Says Johnny, "You give me ten cents every Sunday and 
when Christmas comes around I will give you a pound 
of Sunady school candy." Jimmy does not know what 
the candy is worth, measured in money terms. The 
change from one medium of stating the measure of value 
to another medium produces confusion in Jimmy's mind. 
He falls in and is robbed at the times when he is handing 
his dimes over to Johnny at the rate of about 2600 per 
cent. 

All of the value that the worker produces in payment 
for his livelihood is taken from him by the morgan as 
fast as it is produced. Based upon the fixation of the 
amount of that value by the price the goods containing 
it are subsequently sold for, the worker receives back 
a small fraction of the value he produces, done up in a 
form called money. That money just as completely and 
eiTectually disguises the volume of the value it is the 
means of giving back, as did the glass beads disguise the 
amount of value that the Dutch trader gave to the In- 
dian, and as did the pound of Sunday school candy dis- 
guise the value that Johnny palmed of¥ onto Jimmy. 

Like the Indian hunter and like Jimmy, the worker is 
exploited in the handing over of the value to the mor- 
gan as he produces it in the expenditure of his labor 
power. 



CHAPTER XIII. 
AN ANALYSIS OF WAGES. 

The word "wages" is most confusing. The morgan 
with the aid of his pseudo political-economists, has im- 
pressed the designation "wages" upon the living allow- 
ance purchased by the gentile of the first order in the 
manner already described in the preceding chapter. This 
allowance consists in part of a fraction of the portion of 
the free goods of nature that this gentile is entitled to 
before he performs any labor whatever, and in part of a 
fraction of the value that he produces by the expendi- 
ture of his labor power. 

It would hardly be worth while, ordinarily, to quarrel 
about a name. But it has been persistently postulated 
that wages constitute the agreed price paid for pur- 
chased labor. This proposition cannot be critically ex- 
amined and refuted too often. This misconception must 
be cleared away. 

The proposition is based upon three falsities. First, 
it assumes the existence of a contract when there is no 
contract and cannot be any contract. Secondly, it as- 
sumes that something is paid by the morgan to the work- 
ing gentile, which is untrue. Thirdly, it assumes that 
the producing gentile gets that something for his labor, 
which is also untrue. The truth is that the gentiles 
under coercion give up to the morgan all that the lat- 
ter ever possesses. 

Now as to the first falsity: No pretended contract 
relating to the subject matter between the morgan and 
the worker could of right create any obligation of the 
worker, for the simple reason that such contract is based 

147 



148 WHY THE CAPITALIST? 

entirely upon a coercion of the worker by the morgan. 
The worker is not a free agent. The morgan has all of 
the worker's means of obtaining a livelihood within his 
exclusive control. The worker perforce must come to 
terms with the morgan, or get off the earth. Any form 
of contract forced by A upon B by reason of the power 
of A to shove B overboard to drown in the middle of the 
ocean is unconscionable and of no effect. It is no con- 
tract. To say that because individual instances can be 
cited of workers who were successful in resisting the 
morgan and making their livelihood, is merely to cite as 
the rule exceptions to the rule. Tliis is a familiar trick 
of the morgan. It can also be said with equal force that 
men thrown overboard to drown in the middle of the 
ocean have reached the shore in safety. But this would 
not give a validity to the contract forced upon B by A. 
The great majority who have been thrown overboard in 
that way were drowned, and by far the greater major- 
ity of workers are unable to save themselves and fami- 
lies from starvation, or pauperization, or from great suf- 
fering, all of which are equally effective to make the 
contract unconscionable and void, and not worth any 
consideration whatsoever. 

Though the morgan can drive the worker even to 
death, the exercise of a much less power is sufficient to 
render all claims under contracts obtained under such 
conditions invalid because unconscionable. If it is within 
his power to drive the worker into a situation endanger- 
ing his life or his health or that of his wife or children, 
or subjecting him or his wife or children to danger of 
much privation and suffering, or even if by reason of 
his power and position he can drive the worker into a 
fear that any of these evils are likely to occur if he does 
not subject himself to the will of the morgan, then the 
morgan's claim of any contract expressed or implied en- 



AN ANALYSIS OF WAGES 149 

tered into by the worker or imputed to him, is uncon- 
scionable, and gives no right justly enforceable in favor 
of the morgan against the worker. A contract cannot 
be one-sided. If the worker is not under a contract then 
there is no contract resting upon the morgan either. 

As to the second falsity : To say that anything vouch- 
safed to the worker is paid, would be to assume neces- 
sarily that there was a contract or a contractual obliga- 
tion to pay. If we therefore say that when the morgan 
takes from the worker all that is produced by the latter, 
there is a contract to pay, the obligation must be to pay 
back all that was taken. There cannot be any assump- 
tion that it was to be anything less, for that would be to 
assume that the worker had become obligated to give all 
the surplus to the morgan, for which ass^umption there is 
no basis. The implied obligation of the morgan therefore 
would not be satisfied by only paying a part of it back. 
The retaining of any part by the morgan is without con- 
sideration. The claim of rightfulness in retaining such 
part on the basis of a contract is invalid. Such a con- 
tract is a nudum pactum or baseless obligation. There is 
no mutuality of obligation ; it is entirely one-sided. The 
morgan is simply exacting a gratuity. Take the case of 
a plain unvarnished highwayman, who robs a traveler of 
a hundred dollars on the highway. If this gentleman of 
the road should throw a dollar back to his victim could 
that be called a payment? 

The essential fact is that the morgan does not pay or 
give the worker anything. The truth is quite the reverse. 
The worker gives the morgan everything of value that 
ihe the morgan, as a morgan, ever posse&ses. The 
worker produces. The morgan takes, and then returns 
a modicum to the worker. 

Suppose I erected a toll gate and made every passer-by 
hand over to me three-fourths of what he has with him 



150 WHY THE CAPITALIST? 

before he can pass on the road. Would I be paying him 
the one-fourth that he retains? What if he is grateful 
to me for not taking all, or admits anything you choose 
to prate or preach to him on the subject of honest thiev- 
ery? What if he has been fooled into some belief by false 
prophets, preachers and teachers? In what way would 
the case be different if I added some rigmarole procedure, 
made him unload his all into my crib, and then measured 
out to him one-quarter? Or further, if you please, what 
difference would it make if — instead of measuring out to 
him the one-quarter, I gave him certain pieces of metal 
with figures and pictures on them and gave a set of 
names to these pieces of metal, told him that they consti- 
tute a more convenient medium of exchange, that other 
persons would take them in exchange for other things? 
What if I add to the confusion of thought by adding to 
these pieces of metal the generic name of "money"? 
The nature of the transaction is always the same, and 
no matter how many times I juggle the issue, it will 
always remain the same. My *'brain" work will only 
have one purpose and that is to befuddle and deceive. 

To sidetrack on to a claim that the morgan as tollgate 
owner is gathering his harvest for upkeeping the road is 
not to the point now before us. If, however, the thought 
cannot be separated from what I am now treating on, let 
us bear in mind that the keeping up of the road is used 
only as a means to an end, — that end is to exact the tribute. 

It is incontrovertable that the morgan pays the worker 
nothing whatever. The case is quite the reverse. To say 
that the worker pays the morgan would be putting it 
too mildly, and would be falling short of the truth of the 
transaction. The morgan, as such, renders no service at 
all and gives nothing entitling him to take any of that 
which he does take. In other words, neither his brain 
nor the thing he calls capital does anything. It does 



AN ANALYSIS OF WAGES 151 

not help or participate in the production of anything, and 
it is not entitled to any compensation or to participate 
in any division. 

The worker does not pay. He is held up. He simply 
Stands and delivers everything he has to the morgan. 
His pockets are turned inside out, and he gratefully re- 
ceives back from the morgan a niggardly allowance to 
prolong his life and propagate his species. 

I have now to consider the third false proposition of 
the morgan's pseudo-economists, namely, that the allow- 
ance called wages is received by the worker for his labor. 
This also is as far from the truth as any claim can well 
be. They prate wisely of labor being a commodity 
thrown upon the market for sale, and that it is subject 
to the same rules of barter and sale that other commod- 
ities are subject to. They put it upon the same footing 
with pork and whiskey. A greater absurdity has never 
been uttered. Here, too, the self-sufficient complacency 
with which they view this eccentricity of their minds is 
astonishing. 

When the morgan buys bacon he buys it by the pound 
and he pays for as many pounds of bacon as are delivered. 
When he wants to buy hog meat he does not have a 
porker brought to his house or workshop at seven o'clock 
in the morning and driven around the yard or shop until 
six o'clock in the evening, then open the gate and let 
the creature go. That, however, is the nature of the 
transaction when he claims to buy labor. The difference 
is that the living porker's presence and the right to drive 
the porker around cannot be made to produce surplus 
value. When the morgan "buys labor" he has the worker 
to come around and obey orders. He may have the 
worker to walk around and grunt like the porker if he 
wants to, or he may have him sit quiet all day, with his 
hands in his lap. Now suppose the morgan does that— 



152 WHY THE CAPITALIST? 

and sometimes on rare ocasions he does, — where is the 
labor that was bought? It is not. It cannot be said 
that it was wasted. That would be a misuse of terms. 
You cannot waste that which does not exist. A hard 
pressed morgan economist perhaps will assert that it 
was a waste of opportunity. That would be assuming 
that there was an opportunity, which would be unwar- 
ranted. He was brought around to subject himself to 
the will of the morgan and the morgan in the assumed 
case chooses to keep him in idleness. The morgan has 
had all that he bought. In such a case he will have 
bought th« gentile's labor time and the sum paid for it 
will have come out of the morgan's pile, and not out of 
any value that was produced by the expenditure of the 
gentile's labor power. 

Now the morgan, in the case cited, got all he bought. 
He buys the porker for his meat and does not care a fig 
for his life. What he claims and gets of the worker is 
the latter's power to work, his labor power, his mind, 
his ability, his loyalty, his skill and the cunning of his 
hand, all that goes to make up his life. The morgan 
cares nothing for the flesh and bones of the worker, except 
incidentally as it affects his power to work effectively. 

The morgan takes the worker's labor power, i. e., his 
life, for a term. The transaction has a well defined pur- 
pose; that purpose is to have work done that produces 
surplus value. 

Does the man in prison sell his labor power to his 
jailor for his rations? The labor power of this man in 
prison is consumed just as much during his incarcera- 
tion, though he produces nothing, and he gets his dole to 
keep body and life together. The morgan never, and 
nobody else ever, buys labor. They never buy anything 
not is existence. A contract might be made to buy some 
non-existing thing, but that only amounts to mutual prom- 



AN ANALYSIS OF WAGES 153 

ises, A to buy and B to sell at a future time ; but there is 
not and cannot be a sale until the thing sold is in exist- 
ence. No labor ever existed at the time it was "bought." 
No labor ever existed at the beginning of the day's work. 
No labor ever existed at any time during a day's work. 
No labor ever existed at the close of a day's work. No 
lahor ever existed at the time it was "paid" for. The 
trouble with the morgan's pseudo-economists is that in 
asserting that labor is a commodity they have — unwit- 
tingly, I may admit — slipped into fiction. The use of 
fiction has led them into absurdities and confusions ; and, 
as invariably occurs, in considering the affairs of the 
morgan with the worker, the pseudo-economists always 
turn the absurdities and confusions of thought to account 
against the worker. It's a case of "presto, there you are, 
it's as clear as mud, and you are out." 

The morgan who claims that he is buying labor, like 
the morgan who claims that he is buying love is simply 
drunk with arrogance. He and his pseudo-economists 
are concealing the truth of the transaction, whether in- 
tentionally or not. In the one case as in the other, he is 
simply buying a slave. He is buying a human life for a 
period of time. Whether the period is long or short, 
measured by the clock, the calendar or his own life, does 
not make any difference as to the principle. 

In his arrogance the morgan often makes loud charges 
that he is not getting all that he bought. He does not 
want any pound of human flesh cut from the quivering 
body, for he cannot make it work in that form, and under 
present conventional ethics he is more used to eating 
pork. What he wants and what he gets by the transac- 
tion, miscalled purchase of labor, is the laborer's life, the 
living, throbbing, working life, the life that produces 
surplus value. 



CHAPTER XIV. 
THE MEASURE OF WAGES. 

"A rose by any other name would smell as sweet/* 
But though man had for an eternity claimed for the rose 
the attributes of bread and meat, the rose would still 
remain as unsubstantial as an article of nourishment. 
No one could ever successfully present a rose to an ox 
as an article of food. The ox would never accept it in 
lieu of a bale of hay. But the human mind with all its 
superiority and advantages over that of the lower ani- 
mals, has its relative weaknesses. That property of the 
human mind which in many other respects is a source 
of strength is also in some respects a cause of weakness, 
The law of compensation holds good. The human mind 
has a greater proneness to yield to the power of sugges* 
tion than we are ordinarily willing to admit. In truth that 
power is to some minds well nigh irresistible. 

Under the influence of suggestion, not the least of it 
contained in human language, man has assumed that as 
a matter of course and without question the idea of wages 
is identical with the principal of reward. Nothing was 
ever farther from the truth. Would any one consider 
the stale bread and water thrown to a prisoner locked 
within stone walls and steel bars a reward for not bat- 
tering his brains out against the steel bars? Even if, by 
the power of constant suggestion, you should succeed 
in making the prisoner believe that his proper place is in 
prison; that restraint is a joy; that he is happier there 
than he could be anywhere else; that the tyrant who had 
him thrown into prison is a most kind and loving friend; 
that his incarceration was only for his own best interest; 

154 



THE MEASURE OF WAGES 155 

that the jailor is a guardian angel and the turnkey also ; 
that it would be wicked and sinful to find fault with his 
fare or his lodging, or to steal an extra piece of bread 
whilst the guard was not looking, and that it would be 
a mortal sin to kill the guard or jailor, no matter how insult- 
ing or cruel they might be; that it would be a sin to 
covet anything the guard or the jailer or the despot had, 
and if you made him believe his cell a palace, the afflu- 
vium of it the perfume of never fading roses, the stale 
bread, ambrosia, the foul drinking water a nectar; could 
anyone, notwithstanding the subjective and befuddled 
condition of the prisoner and the phantasmagoria obsess- 
ing his mind, could anyone say that the stale bread and 
water thrust into this prisoner's cell to keep him alive 
constitute a reward? If this daily ration is not a reward 
what is it then ? It has all of the essentials and elements 
of that which is called wages. It is enough to keep the 
prisoner a prisoner. With less he would cease to be a 
prisoner. He would become desperate and make his 
escape by breaking the walls or the bars or picking the 
lock or by killing the guard or jailer ; or he would commit 
suicide or die of starvation or disease resulting directly 
or indirctly from lack of nourishmnt. At all events, he 
would cease being a prisoner. 

The allowance thrown to the common prisoner is 
measured by the amount required to keep him alive in 
the place where he is incarcerated. It is the amount 
needed to support him in his station in life. This is 
exactly the measure of the worker's wages. 

A large portion of the dole called wages already be- 
longs to the worker, without his doing any work for it. 
This is the case with all expropriated mankind, whom I 
have called the gentiles. The birds of the air, the horse, 
the ox, the antelope, the hare, the bear, the cat in the 
wilds, the fish in the sea, all have their allowance with- 



156 WHY THE CAPITALIST? 

out paying. They do not work for what they get, any 
more than simply to take it. Nature supplies all. The 
creatures in the wilds pay no rent, interest or profits to 
anyone. Theirs is the state of nature and not that of the 
morgan. What they consume is all free goods. Now, 
nature is not a whit less generous to man than it is to 
the antelope or the fish or any of its other creatures. For 
man her goods are also free, and nowhere can be found 
the slightest warrant or justification for saying that this 
is less so because a part of mankind, by its work, supple- 
ments the work of nature in the production of useful 
things. It is clear that every man is entitled to all that 
his work produces. But this does not mean that he can 
rightfully be clubbed away from his share of that which 
he did not produce but which nature produced for him 
without his conscious assistance. The affirmation of the 
first stated right does not mean and cannot legitimately 
be twisted ino meaning a negation of the other and earlier 
right. The preposterous argument of the morgan and 
his sycophants deducible from the wage system, m re- 
spect to the disposition of nature's free goods, is that 
because the worker applies himself to supplement the 
work of nature to increase and accelerate production, it is 
perfectly legitimate and ethical to rob him of his birthright. 
All that I have said about the free goods of nature 
applies with equal force to the benefits and advantages 
that result from that vast accumulation of science and 
education that comes down from the common ancestors 
of modern man, beginning with the first applicaion to 
work, study, observation and experimentation, and 
which the worker, as gentile of the first order, in common 
with the rest of the gentiles, is denied the right to avail 
himself of for his own benefit, because the material and the 
implements upon which and with which to do so have all 
become the private property of the morgan. 



THE MEASURE OF WAGES 157 

The common heritage has been taken from the gentile 
by means of false morals and false laws. The morgan 
claims it as his private property. He maintains this 
claim by means of his church and his state, the church 
keeping the gentile in ignorance of his disinheritance and 
the state clubbing him away from the morgan's afore- 
said private property. Then, as if to cap it all, the mor- 
gan mocks the gentiles by telling them through his 
mouthpieces, that it is their church and their state. He 
feels secure in the belief that perverted history will always 
be able to support his pretensions and that the gentile 
mind will never be permitted to understand that controll- 
ing and owning is in effect the same thing. What a beau- 
tiful dunce cap the gentile is wearing! It is not neces- 
sary to assert that the morgan was ever actuated by any 
design to bring about such a state of affairs or that he 
understands all or any of the detail workings of his church, 
state and society. It might even be conceded that he 
never designed, or intended and never knew and does not 
know or understand. His economic interests work that 
way and determine the trend and direction. That is 
quite sufficient. 

The wage worker has been so much impressed with a 
sense of justness and righteousness of the laws and the 
ethics of his country and of the society that has been 
imposed upon him, the moral rules and precepts preached 
at him and taught to him, that he keeps well within the 
line of those laws and those moral rules and precepts, 
however false and misleading they be. It does not make 
a particle of difference whether this is because of a 
pure devotion or because of a fear of untoward conse- 
quences following any transgression of those laws and 
precepts. The effect is the same whether he fears the 
lash of the law, or shrinks from the thought of ignominy. 
Nor does it make a particle of difference if the effect on 



158 WHY THE CAPITALIST? 

his conduct be produced by an active and over-tender 
conscience, the congeries of sense and folly of his time, 
station and country. The schools, the churches, the 
press and the politicians, ever subservient to the morgan, 
all of them, are constantly doing all within their power 
to keep this conscience alive and tender. 

The great mass of workers are workers as a result of 
compulsion, legal or moral. They are prisoners of toil, 
fully as much as the prisoner within stone walls and 
steel bars. That here and there a worker, finding him- 
self ground down to the very point of despair and doubt 
as to whether his existence is worth while or not, throws 
all scruples to the wind and with that temporary extraor- 
dinary and almost superhuman strength and daring that 
sometimes come from sheer desperation, fights his way 
into another order or class, does not prove anything to 
the contrary. It, in fact, helps to make the rule so much 
stronger. For every time a worker breaks from the 
prison, the walls and bars are made stronger and more 
unbreakable for the others still in wage-bondage. 

Where thievery is the game, the man that does not 
understand the game or because of scruples refuses to 
play it, must give way, and he is written down a fool, 
an incompetent and unfortunate. The man that plays 
at the game, though of mediocre intelligence, still, by 
stolidly playing on, may acquire a craft and cunning that 
will answer his purpose, and may even acclaim his the 
highest kind of intelligence. According to the pile of 
chips he rakes in the dolt is credited with superior brains 
and mentality. 

Man may be held a prisoner without the aid of stone 
walls, steel bars, hand cuffs or shackles. Circumstances 
are just as effective and require fewer jailors. The power 
to exclude man from the things he must have, to drive 
him into the desert, as it were, makes him as much of a 



THE MEASURE OF WAGES 159 

prisoner as to lock him up, and relieves the jailor of the 
feeling of responsibility to keep the prisoner alive. To 
have the power of dictating to him the terms and condi- 
tions upon which he may have access to the things he 
must have in order to live, makes of him even more of a 
prisoner than to throw him into jail. The power em- 
braces the power likewise to enslave the mind. The 
empty, seductive and deceptive right that is somtimes 
accorded the worker to choose as to which yoke he will 
bend his neck under carries with it the most powerful of 
false suggestions of freedom of contract. Would there 
be any real freedom of action given the prisoner by per- 
mitting him to choose which cell in a jail he shall be cast 
into when the rations and accommodations are the same 
for all the cells? 

I said the prisoner in the cell must receive enough to 
keep him alive and meet his imperative wants in the posi- 
tion in society that he at the time occupies, namely, that 
of a prisoner, else he will break out of prison, kill his 
guard, kill himself or die for want of sustenance, or of 
such ailments as lack of nourishment produces or super- 
induces. The wage worker must have such an allowance 
to meet his imperative wants in the position in society 
that he likewise occupies. That is, he must have enough 
to feed, clothe and shelter himself, his wife and children 
and supply the things absolutely necessary to appear and 
keep himself and family as members of society. When- 
ever he gets more than that in any branch of industry, it 
will be because of a shortage of the supply of workers in 
that branch of work, and it will only be a temporary 
advantage. To the extent that the allowance to a worker 
in his line of work is greater than in other branches of 
labor, will other workers be attracted to that kind of 
work, until the supply meets and exceeds the demand, 
and consequently through the competition of those seek- 



160 WHY THE CAPITALIST ? 

ing jobs, the allowance will gravitate to its normal level 
under the wage system. Furthermore, to the extent that 
that allowance is greater will inventive genius be stimu- 
lated to divide and subdivide the work and to introduce 
labor saving tools, devices, and machines to render the work 
more productive and thereby reduce the demand for work- 
ers, thus bringing about the same results as v^ould be 
brought about by an increase in the number of workers 
applying for employment. Thus again we see that the 
much extolled "law" of supply and demand is entirely 
subject to other forces and influences and therefore is 
no law at all. If the worker gets less than he must have 
to meet his needs, he will make extraordinary efforts to 
break away from that branch of employment, some suc- 
ceeding, reducing the supply of workers in that line, or 
he will be unable to maintain the required health 
strength and spirit, so lessening the amount of his work. 
Fewer new workers or apprentices will seek to enter that 
field of labor. The worker in such lines of employment 
will succeed in raising fewer children, the young men 
will refrain from getting married. All of the forces and 
influences of repulsion will work against the morgan's 
pressure, called the "law" of supply and demand. Thus 
the influence will be to reduce the supply of labor in the 
unfavorable occupations, and, other things being equal, 
the allowance of the worker called wages will resume its 
normal level on the line of a bare living. 

The more abject and defenseless the worker, and the 
more easily he can be replaced, the more easily will the 
morgan be able to keep his allowance down at the lowest 
living line. This is not because of any "law" of supply 
and demand, but because the pressure on the worker for 
self preservation drives him to accept terms to get a lit- 
tle of nature's life-giving and life-preserving goods that 



THE MEASURE OF WAGES 161 

the morgan wields domain over and of which there is an 
abundant supply, both actually and potentially. 

When the Roman army was sending into Italy and 
Sicily a continuous stream of slaves, the morgan drove 
his slaves to work in the fields as naked as they were 
born, fed them on the very cheapest of food, consisting 
principally of nuts and garlic, and often not sufficient of 
that ; housed them in the most miserable of hovels, often 
corralled them under the open sky, without the sem- 
blance of bed, clothing or furniture. If the slave became 
sick, he was left to die without medical care or attend- 
ance. Often the sick were given extra beatings for being 
sick. It was cheaper to get fresh slaves than to care for 
them. To house them, clothe them and feed them with 
a view to keeping them well and comfortable was too 
expensive, from the point of view of the morgan's eco- 
nomic interest. It reduced the profit on the slave's work, 
it cut down the amount of surplus value that the slave 
produced. I was more profitable to let the sick slave die, 
and supply his place with a new captive. 

Negro slaves in our southern states received much 
better treatment because the supply by conquest had been 
shut off by national law, and it cost money to breed and 
raise them. Therefore, the same material interest which 
in ancient Rome led to the most atrocious treatment of 
the slaves because it was cheapest and most profitable, 
led in our country to the exercise of some care and solici- 
tude for the slave's well being and comfort. The "mis- 
sus" herself would often sit up nights as nurse, or brave 
th-e storm, to save the life of a thousand-dollar "nigger." 
The negro slave in the south received a sufficiency of 
wholesome food, necessary clothing and housing, furni- 
ture and household utensils. When sick he received 
medical care and attendance. His station in life was that 



162 WHY THE CAPITALIST ? 

of an Almerican negro slave, and his living v^as of that 
standard. 

When it comes to the worker dubbed free, we have 
again the economic interest of the morgan determining 
the mental attitude of the morgan toward him. It is not 
of the slightest material interest to the morgan whether 
the worker is sufficiently fed, clothed or housed, or 
whether he is in good physical health, or whether his 
limbs or body are torn and broken or not, so long as he 
works and produces the requisite surplus value. The 
morgan does not even honor the worker by hating him. 
He hates only the agitator and him only because he 
threatens his riches and his regime. With the morgan, 
aggrandisement is a callous fanaticism, a sheer indiffer- 
ence to humane pretences. All the morgan wants of the 
worker are long and productive work days, with the 
lowest possible amount allowed the worker as wages. 

That which is called w-ages is not compensation for 
labor or for labor power expended. It is merely a dole 
of nature's free goods and of the value created and per- 
force allowed the worker for his upkeep. It is to get his 
labor power at the bare cost of its production. It is not 
based upon contract. It is pretended to be based on 
contract. But the claim is as false as false can be. The 
whole wage system rests entirely upon force and fraud. 
The forms and formalities of contract are nothing but 
forms and deceiving formalities. This dole, called wages, 
is measured and estimated by the same standard that the 
daily rations given the prisoner in jail is measured and 
estimated by. The question never is: How much did 
the worker produce? It always is: How much must be 
given him to live on, of the coarsest and commonest that 
will maintain him as a worker? That is all he is worth, 
that is all he can get, that is what you can get him for in* 
the open market where he is compelled to compete for a 



THE MEASURE OF WAGES 163 

living, because he has been barred out from his heritage. 

Custcfm sets the standard of morality. Therefore the 
living dole the wage worker gets is called the fair wage. 
The amount the worker needs is made the bone of con- 
tention, the subject of many long and learned disquisi- 
tions as to how many ounces of wheat and how man^ 
ounces of chaff should slip into a worker's alimentary canal 
to keep him in working condition. 

Reduced to its final analysis, the wages of the wage 
worker, the allowance of the chattel slave and the rations 
of the prisoner in jail, are all measured according to the 
same principle and standard. 



CHAPTER XV. 
THE STRUGGLE OVER WAGES. 

I stated that the amount that must naturally be al- 
lowed to the worker is measured by the amount that he 
needs to live, replenish his labor power and reproduce 
his kind. Of course, I am speaking of the average 
worker in each calling. This amount varies with the 
different occupations and it varies with locality and also 
with time. If there were no change in the needs of the 
worker or the rapacity of the morgan the state of con- 
stant industrial war or preparation for war that we 
witness would not be. The amount of the allowance 
would gravitate to its normal level and remain there. 

One of the secret and potential causes, even if a re- 
mote cause, of the struggle over the amount of the allow- 
ance is the school house. The lower the degree of the 
worker's education, the less he needs to live upon, the 
less leisure he needs to give to social duties, studies, re- 
flections or recreation, in a word, the more hours he can 
work in a day. The illiterate worker does not want 
newspapers, or books or anything they suggest or create 
a longing for, either for himself or family. The coarsest 
clothing will do for him because he does not know of 
anything better. The most uncomfortable and unsani- 
tary house satisfies him, first, because he does not know 
anything better for himself, because he is there during a 
very small part of his time outside of his sleeping time — 
for he works many hours a day. The only entertainment 
he craves is that of the saloon. His life is a humdrum 
of toil. There is an absence of anything attractive or 
refining in his home. His lack of education prevents him 

164 



THE STRUGGLE OVER WAGES 165 

from enjoying anything better even if it v^ere offered 
him. The craving for as much of a contrast as can be 
gotten and gotten quickly, away from his drudgery, 
proves him still very much of a human being. There is 
but one course for him, and that leads to the saloon. 
There he spends of that which he and his family need 
so sorely to purchase that which he needs most, namely, 
a sharp contrast and complete diversion of mind. His 
very beastliness proves that he feels the need of better 
conditions. 

With the school house there gradually comes a trans- 
formation. The worker begins to read. And from the 
never-ceasing torrent of scandal and sensationalism there 
adheres to his skin now and then small particles of new 
things. His appetite for them increases. 

The hopes and aspirations of the worker to achieve 
a better and higher life for himself and family are seized 
upon by the morgan and utilized as an additional instru- 
ment by which to goad the worker on to still greater 
efforts and a greater productiveness of value which swells 
still further the volume of surplus values. The morgan's 
agent comes around with linoleum for the kitchen floor. 
Consideration for self and family move the worker to 
pinch a little and buy linoleum. The agent also has rugs 
and carpets. In time these things are gotten in the same 
way. Now these things are all made in the morgan's 
factory, and as the morgan likes to rake in large quanti- 
ties of surplus value, he, or his sales agent, has many 
clever arguments and persuasions to put forth to the 
worker to buy, to beautify his home and to make it more 
comfortable for his wife and children and a little more 
attractive for himself. 

The morgan's factory also turns out window shades 
and lace curtains, and chromoes in large quantities. All 
of these goods the morgan pushes the sale of. It is 



166 WHY THE CAPITALIST? 

business. The worker who does not buy them is ashamed 
to meet the worker that does buy them. The morgan's 
business booms. These things become a necessity. They 
become as necessary as bread. Great streams of additional 
surplus value flow into the coffers of the morgan as a result 
of the manufacture and sale of these new necessaries of 
life. Good business is the result and great prosperity — but 
not for the worker. 

By the operation of natural law, like the law of gravi- 
tation, all of the additional wealth and prosperity flows 
into the capacious receptacle of the morgan. The law 
that measures the prisoner's rations also measures the 
worker's allow^ance. It is a hard law, and like hardened 
arteries stubbornly resists the flow of any greater volume 
to the worker to meet his new and imperative wants. 
The worker demands a readjustment, claims he does not 
get enough to live on. The morgan is incensed and in- 
dignant at the insolence of asking for more. The rupture 
leads to a strike. The morgan is complacent in his claim 
of being in the right and now charges that the worker's 
trouble comes from high living. He scours the country 
for other workers who have not yet the disease of high 
living, workers whom he would not have taken on before 
the strike, and with their servile help he tries to break 
the strike. Sometimes the striking worker wins, some- 
times the morgan wins. But the victory of neither the 
morgan nor of the worker is ever permanent. The same 
influence keeps still at work. The morgan himself con- 
tinues to have his agents push the things turned out by 
his mills and that whet the appetite for higher living, and 
it is only a question of time that the former strike break- 
ers are driven by the same spur of necessity. Tb'ey also 
strike. The morgan is extremely annoyed. His views 
on good citizenship and morals are dictated by his cash 
account and his idea of liberty is the child of his insa- 



THE STRUGGLE OVER WAGES 167 

tiable appetite for exploitation. He sincerely thinks the 
world will be submerged in wickedness if any limitations 
be placed upon his divine right of exploitation. The 
wreck of matter and crush of worlds will be upon us if 
"our workingmen" be not held within the restraints of 
"reason." In such a holy cause everything is justifiable. 
Police, militia, injunctions are appealed to, and become 
so familiar as to lose their terror. 

The worker when the spur of necessity urges him to 
strike, thinks, if he does not say, "to hell with the police, 
militia and injunctions." In America, the morgan used 
to send his agents into other countries* and bring in 
hordes of illiterate and servile minded, who did not know 
anything about even a separate room for a kitchen, to 
say nothing of linoleum, rugs, carpets, curtains, books 
and newspapers. But the worker has a vote and he 
begins the long, wearisome and painful task of calling 
on the candidates for legislative office year after year, 
and as in course of time the drop of water wears the 
stone, there emits from the halls of legislation with pain- 
ful labor, and at long intervals, statute after statute on 
the subject of foreign labor, prison labor, child labor, 
female labor, factory inspection, compulsory education, 
compensation for loss of life or limb, all of which the mor- 
gan calls vicious class legislation. 

The morgan, however, keeps right on seeking new in- 
vestments for his constantly accumulating pile of surplus 
values. He has piano factories built and gives orders 
to push the sale of pianos. Music teachers appear in ever 
increasing numbers, also agents. They urge the worker 
to buy a piano for his little daughter and to let her take 
music lessons. Still the surplus values keep on increas- 
ing in the morgan's vaults in geometrical proportions almost 
to the bursting. 

The only remedy the morgan can think of is to make 



168 WHY THE CAPITALIST? 

more investments and still further increase and accelerate 
the flow of surplus to his coffers. His attention is di- 
rected to hundreds of various schemes. He acquires 
summer resorts, lake side, ocean side, mountain side and 
mountain top. He has new railroads built to them, new 
steamboat lines and trolley lines, some near, some far, 
some short, some long, so as to tempt every purse, even 
the leanest. He has his printing press to work night 
and day, spreading the most seductive inducements, the 
most glorious descriptions and the most potent reasons 
why every man, woman and child should take a holiday, 
a trip, a vacation, just across the river, or to the moun- 
tain, or to the lake, or up the lake, or to the sea shore 
or across the sea. The morgan backs and pushes every- 
thing continuously and with never abating zeal, to edu- 
cate the taste of the worker to need, yes, to demand, 
these things. The morgan does not do this to benefit 
or elevate the worker. Far from it! He does it to get 
back the worker's living allowance. He does it to in- 
crease and accelerate the flow of surplus value to the 
bursting vaults of the morgan. 

Incidentally some few of the workers get some benfit 
in the way of improved health and brbader education, 
this appetite, however, growing all the time. In the 
meantime, strikes are increasing in frequency, extent, 
effect, destructiveness and bitterness. The morgan, bas- 
ing his calculations upon the well considered probability 
of returns that he figures he has a right to expect, con- 
tracts more obligations, plans greater things ; the pur- 
chase of dukes for his daughters, yachts, limousines, 
country seats and miles of game preserves for himself, 
his sons and sons-in-law, art collections, million dollar 
parties, princely gifts to educational institutions, so- 
called, and libraries and churches for his own glorifica- 
tion. This is a chronic state of things, and a demand of 



THE STRUGGLE OVER WAGES 169 

the worker for more, threatening to impede the flow or to 
trim off a noticeable amount of the surplus value rushing 
the morgan's way is an annoying experience. In fact, the 
morgan regards it as wicked. 

If we concede for the present purposes of the argu- 
ment that the worker gets more than formerly, it is at 
once apparent that this increase is not nearly so much as 
is generally supposed. In the first place, if he gets a 
little more wages the morgan immediately begins to add 
the amount of the increase, together with a bonus, to the 
selling price of the commodities produced by the worker. 
The worker also consumes of these commodities that he 
produces. Hence, every time he gets a little more to 
catch up with the cost of living, that cost of living begins 
another upward move. Every branch of work then has 
the same experience, and every worker chafes because 
his allowance is no longer equal to the demands of his 
standard of living. So every worker is compelled again 
and again to demand a readjustment. In name and lan- 
guage he demands a raise. But it is in name and lan- 
guage only. In truth and in fact, he is rebelling against 
the shortening of his rations. As he gets what should be 
his allowance in a makeshift and cheating medium called 
money, an additional source of confusion of thought re- 
sults. 

We will suppose that the amount of necessaries that 
one dollar will purchase is now less by ten per cent than 
it was a year ago. The worker because of this reduction 
in the purchasing power of the dollar is certainly getting 
less than formerly. If his wages must be kept up to the 
living line he must demand tbat the shortage be made 
good. To say that a worker receiving ten dollars in 
medium of exchange now, where he got eight dollars ten 
years ago, is getting more than he got before in spite of 
the fact that in the form of the ten dollars the medium 



170 WHY THE CAPITALIST? 

of exchange does not give him any more in substance, 
does not make his living allowance out of the value he 
produces, is nothing but sounding brass. Money in the 
hands of the worker is never anything more than an 
artificial medium of exchange. To the worker it is not 
worth an iota more than it will procure for him of the 
free goods of nature and the value that he produced 
under the morgan's rule and now in the hands of the 
morgan. If ten dollars will not buy any more to-day 
than eight dollars did ten years ago, then the worker's liv- 
ing allowance amounts to no more today than it did ten 
years ago. 

So we see that the worker, in order to keep himself up 
with the living line, is compelled to make frequent de- 
mands for readjustment and to enforce those demands with 
costly and destructive strikes and labor wars. 

If there were a scientific medium of exchange, of a 
fixed and unvarying standard of measurement, it would 
be of immense service and avoid much confusion of 
thought and understanding. But as it is, we are harassed 
by all the pestiferous annoyances and filchings bred by 
what in fact is a double standard of value in one medium, 
namely, gold. When the worker produces say 920 units 
of value, of which his living allowance is 148 units, he 
gets it in something the value of which it is as difficult 
to fix down as the proverbial Irishman's flee. In the 
'United States and most other countries he is put off with 
a haphazard wage expressed in gold. Of course, I shall 
not spend any time discussing silver and paper, as those 
are only the tokens of money redeemable in fixed quanti- 
ties of gold. The amount of value contained in a given 
quantity of gold fluctuates. In fact that value, within 
the memory of man, has constantly been diminishing, as 
can be seen by the constant diminution of its purchasing 
power. Gold is brought out of the ground by work. 



THE STRUGGLE OVER WAGES 171 

There are very few useful purposes that gold can be put 
to. Filling teeth with it is one« It is used principally 
for ornamental purposes, and in the form of coin as a 
medium of exchange. The cost of the labor power ex- 
pended in digging it from the ground, affords only a 
minimum of the value demanded in exchange for it. If 
it had not been made the medium of exchange by artifi- 
cial laws, gold would probably be very much less in 
fashion now, and its power to exchange for value in the 
form of useful things would be reduced very much nearer 
the cost of the labor power consumed in its production. 
Gold has an artificially created price imparted to it be- 
cause by virtue of law it is a legal tender. Outside of 
buying necessaries of life, it is only good to invest, that 
is, as a means to get possession of something with which 
to exploit the worker and rake in surplus value. 

The press for investment by the morgan of all his 
accumulated surplus values is only intensified by the ad- 
dition to it of the gold containing surplus value over the 
cost of the labor power consumed in its production. It 
is of little importance to the morgan what price he pays 
for his personal needs, for they are but few compara- 
tively, and the cost of them is of minor consequence to 
him. The prices paid by the morgan in the making of 
investments are also of minor importance when it comes 
to acquiring control of the resources of nature and the 
means of production. To him, complete control of big 
things is cheap at almost any price. He does not want 
gold, he wants interests, he wants control of the forces 
of nature, he wants the means by which he can draw to 
himself the surplus value produced by the worker. 
Though he pay high prices he makes it up many fold 
again by the surplus values raked in. By paying high 
prices in money to gain control of the resources of nature 
and the means of production, he is even cheapening 



172 WHY THE CAPITALIST? 

that very money by boosting prices and by restricting 
opportunities for investment of that money in profit win- 
ning enterprises. 

The purchasing power of money is being continuously 
depressed by the morgan. His operations on a gold basis 
are doubled and quadrupled over and over again, first 
by token money, secondly, and enormously more, by 
bank balances, clearing house operations, drafts, bills, 
notes, etc., etc. Thus he sets the pace and when he 
causes prices to go up by the prices he himself pays, he 
is only doing that much to establish a greater measure 
of the profits to be gotten by himself, to justify as it 
were, the rate of the returns on his investments. 

O'uly one thing must be kept down, and that is the 
cost of labor power. That must by all means be kept 
down to the lowest notch of cost. Therein lies the secret 
of the growth of surplus values. 

I said that gold was the medium of exchange. Per- 
haps it would be more accurate to say that gold is an 
artificially created basis of exchange. Everyone has a 
right to demand payment in gold, but no one does, ex- 
cept in settling international balances. If everyone 
demanded payment in gold, it would merely result in a 
shufifling back and forth of the metal. 

Things are very much different with the worker. To 
him money is a very much different sort of thing. To 
him money is made to represent life, and not mere poker 
chips on a gambler's table. If the gold received by him 
in lieu of his daily allowance were weighed out to him in 
accordance with its daily worth, i. e., in accordance with 
what it will buy from day to day, he might, possibly by 
constantly watching the market, be able to know as to 
whether he is getting all of his stated allowance or not. 
But even this meagre protection is denied him. He is 
befuddled by another trick and that is that the gold or 



THE STRUGGLE OVER WAGES • 173 

the paper and silver representing it, v^ith which he is 
paid is given another name, and as that name is kept 
always the same, he is deceived into assuming that the 
value of the gold is stable because the name is stable. 
The metal pressed into uniform pieces is called one, five, 
ten and twenty dollar pieces, respectively. One piece 
contains 25.8 grains of gold, .9 fine, and is called a dollar, 
another 129 grains and is called five dollars, another 258 
grains, is called ten dollars, another 516 grains, is called 
twenty dollars. The pressing of this metal into these 
respective pieces is merely for the purpose of conven- 
ience in handling, like the pressing of butter into one 
pound cakes, and is not intended to and does not add or 
detract a particle of value. Outside of the convenience 
of handling and the assurance of fineness and weight, 
these pieces, called coins of one, five, ten and twenty 
dollars have no more value than in the form of nuggets. 
In large transshipments, the metal, in fact, is in the form 
of bars. 

But here comes the rub. Although gold has no sta- 
bility of value despite its being pressed into coins and 
given a name, and is in fact constantly declining in value 
for purposes of buying the necessaries of hfe, so far as 
palming it off onto workers, and only for that purpose, 
it is regarded and treated as a fixed, stable and unvarying 
standard. The worker is compelled by his condition and 
circumstances to take this constantly diminishing metal 
measure, or its representative, in lieu of his living allow- 
ance from the value that he produces. As a consequence 
he sees his daily allowance constantly dwindling. He 
shifts along and endures the loss until it is no longer 
endurable. Then he demands a readjustment and if 
necessary again strikes to enforce his demand. The 
double standard is worked off on him by the simple 
device of applying a name importing fixity and perma- 



174 WHY THE CAPITALIST? 

nence to a thing that is constantly declining in its pur- 
chasing power. Then he is charged with being the dis- 
turber of the equilibrium whenever nature rebels. 

Even the worker cannot live upon bread alone. He 
must have more than barely the material things necessary 
to support life. Yet the morgan, with his pseudo econo- 
mists, keeps his press, his pulpit and his university pro- 
geny constantly busy reminding the worker of the things 
he has now that he did not and could not have a century 
ago. 

The worker has, however, been awakening and mar- 
shalling his forces. He has been coming to a realization 
that he, too, is here to live and that to live means more 
than simply to work and to get in return the allowance 
measured on the same basis and principle as the allow- 
ance of the prisoner in jail is measured. 

For the most part, the worker has an ambition to win 
a larger living allowance, and then to win gradually more 
increases, without thinking to change in principle the 
arrangement under which the morgan piles up his moun- 
tains of surplus values. To attain this end, the worker 
has formed extensive organizations, accumulated funds 
and waged war from time to time. These wars are often 
directed against gentiles of the second order because 
they stand between the morgan and the gentiles of the 
first order. On the whole the worker has won his fights. 
Even his defeats in the long run of events hlave proved of 
benefit to him. But his victories have to a very large ex- 
tent been hollow victories. Whenever he struck for 
more, he was largely misled by a misuse of terms. The 
"more" was only in name. In reality he struck against 
a shortening of his allowance resulting from the money 
juggle and other maneuverings of the morgan. He is not 
getting more, he is getting less than formerly. The 
amount that a man gets is not to be measured by the 



THE STRUGGLE OVER WAGES 175 

yard or by the quart or by the pound. It must be meas- 
ured by what he needs. If a man does not get enough 
to live in a becoming manner in the community in which 
he is, then, although in actual bulk, the material be more, 
in truth and in fact he is getting less than he got when 
the standards of life were more modest and it required 
a less quantity in bulk of material to live becomingly in 
his community. 

From the morgan's point of interest, the worker lives 
only to work, therefore he need not be allowed any more 
than just enough to enable him to work and reproduce 
his kind for the labor market. The morgan's interest is 
that the worker live on the smallest allowance that he 
can be squeezed to and do the greatest amount of work 
that he can be driven to do. From the worker's point of 
interest, he works only that he may live. Hence it is to 
his interest to do as little work as he can get on with, and 
get the most possible to be gotten out of life. 



CHAPTER XVI. 
SUPPLY AND DEMAND. 

The morgan's classical political economists seek to 
account for all the disparities that exist in human society 
by what they call the ''law" of supply and demand. They 
tell us that if a commodity is plentiful it is cheap, if 
scarce it will be dear. They say that labor is a com- 
modity and is subject to the ''law" that governs the 
price of all other commodities, that when the supply of 
labor exceeds the demand, the price of labor, wages, 
must decline, and when the demand for labor exceeds 
the supply, the price of labor, namely wages, will ad- 
vance. Tbey say that things work naturally that way 
and that it is folly to oppose nature. 

The so-called "law" of supply and demand is the great 
conventional stumbling block to the study of the meas- 
ure of values and of wages. The existence of such a 
"law" as a law of economics has never been established 
by valid proof or argument. It has merely been asserted. 
It is a piece of half-way reasoning. It furnishes a sort 
of sheltered haven for those who do not care to search 
any farther. It furnishes just enough of the stuff that 
looks like logical argument from sound premises to 
satisfy the indolent mind, the mind that loafs on the 
job ; it circumvents troublesome questions and then claims 
credit for solving them. These learned doctors claim 
much credit for their discoveries, are received with open 
arms by other learned doctors, are decorated with 
wreathes of roses and then richly rewarded for great 
services pretended to have been rendered to mankind. 

The whole being of the man who has studied modern 

178 



SUPPLY AND DEMAND 177 

political economy and sociology rebels against this so- 
called economic *'law." Some who have only scratched 
the surface shrug their shoulders and say, "We can't get 
away from it." Some say, ''It is a harsh law and not 
entitled to any respect, therefore we will try to circum- 
vent it or break it.' Still others, guided by a sort of 
intuition, deny that there is such a law, and as good and 
loyal supporters of the gentile cause, say, ''It is false. 
There is no such law." The latter constitute a very 
large number. They are conscientious students. They 
proceed from established facts to sound conclusions. 
Those who premise the existence of such a law make the 
assertion in the most confident and authoritative tone 
they can command and pass on to the next subject, leav- 
ing the questioner to feel stupid for ever having asked 
questions about it. But a great deal better treatment of 
the subject is possible. 

Whenever a question proves so extremely troublesome, 
it is best to analyze it before either trying to answer or 
to solve it by guessing. So, let us first ask. What is 
meant by a law? The answer is that it is a prescribed 
rule. Then, who prescribed this rule? If anyone should 
answer that it was prescribed by man, we might say (1) 
then man can revoke it, (2) that in the study of eco- 
nomics we are studying a science resting upon natural 
laws, and these cannot be subjected to man-made laws. 
If the answer be that it is a natural law, then let us enter 
a general denial right here and we shall have the issue 
before us. 

It is not a natural law. And whatever we may call it 
for the purposes of the argument, it relates only to social 
relations, and in the absence of human beings it could 
have no existence. There is not a single natural law that 
is in the slightest degree dependent for its existence upon 
man or influenced in its operation by human beings. Not 



178 WHY THE CAPITALIST ? 

a single one of the natural laws can be suspended or in 
the slightest degree modified, intensified or in any other 
manner affected by anything that man can do. 

The morgan nor anyone else can make a pound of iron 
weigh more than a pound without adding to the amount 
of the material, nor otherwise affect the law of gravita- 
tion, nor make twice two any more or any less than four, 
nor change the general law that heat expands and cold 
contracts, nor amend the laws of heat or light or sound, 
nor suspend the laws of magnetic attraction or repulsion, 
or any of the many laws of electricity, hydraulics, pneu- 
matics, dynamics, or mechanics. Who can change the 
laws governing the movement of the earth? Who can 
make the moon come nearer, or go farther from us, or 
show us her other side? Who can change or in any 
manner affect the laws that govern the ocean's tide or its 
currents? Who can change the laws of the season's? 
Who can change the laws of meteorology? W^ho can 
change the law of the indestructability of matter, even 
to the extent of destroying a single atom? To cite any 
more of the natural laws would be wearisome and not 
add to the argument that no man or set of men can by 
manipulation of the market or by any other means affect 
any of the natural laws. These laws are always uniform 
in their operation, never ceasing, never abating one tittle 
all pervading and inexorable. 

How about this so-called law of supply and demand? 
A supply can be created, increased, decreased, or en- 
tirely shut off' by man ; likewise a demand. It is within 
the power of the morgan to set at defiance the "law" of 
supply and demand and decree if he will that every 
worker under his thumb shall receive say twenty-five 
per cent more than the market price of his labor, just 
as he has it within his power to hold him down to the 
scantiest livelihood. 



SUPPLY AND DEMAND 179 

The conventional political economists say that there 
are some goods the value of which is determined by their 
scarcity alone; that no labor can increase the quantity 
of such goods ; and therefore their value cannot be low- 
ered by an increased supply; that some rare statues and 
pictures, scarce books and coins, wines of peculiar qual- 
ity, which can only be made from grapes grown on a 
particular soil, of which there is a very limited quantity, 
are all of this description; that their value is wholly 
independent of the quantity of labor originally necessary 
to produce them, and varies with the varying wealth and 
inclinations of those who are desirous to possess them. 

Thus the whole of this important element of political 
economy is left to be buffeted about as the whims of th€ 
morgan may dictate. That were indeed a sorry sort of 
a rule fjor a science of the material welfare of human 
.beings. 

Their difficulty is that they do not differentiate between 
price and their notions of value. Price is only an expression 
of what they call the amount of value. The expression is 
usually correct. But it is not uncommon that an article sells 
for more or for less than the amount of attributed value it 
contains. Hence we have two serious errors committed by 
the morgan's economists. First, they take the exceptions for 
the basis of their so-called rule ; secondly, they take the ex- 
pression, price, for the substance, value. 

The great masses of humanity are excluded from a 
participation in their heritage. They must buy all their 
livelihood and are fleeced in buying it. To them, all this 
talk of the price paid by morgans for rare wines, rare 
statues, rare pictures, rare books, and rare coins pro- 
duced by gentiles to buy their livelihood, is the sheerest 
twaddle. It is a learned disquisition on the haggling over 
the loot. 



180 WHY THE CAPITALIST? 

If an artist should receive a full equivalent in value 
for a work of art produced by him, say one of the rare 
pictures, how could that afford any possible reason why 
other gentiles should be denied a full equivalent of the 
value produced by their labor, or why they should be 
denied their share of nature's free goods? Or, if a great 
artist be compelled to live the life of a beggar, as many 
of them have, and all the value produced by him in a 
rare statue is appropriated by the morgan in the guise 
of trader or art dealer, wherein does that prove the right 
to expropriate and exploit the remainder of the gentiles 
also? Does the successful spoliation of Tom give a 
vested right to despoil Dick and Harry also? 

This much lauded law of supply and demand is no law 
at all. A mere fragment of truth disconnected and di- 
verted from other and much more important and deter- 
mining considerations, has been accepted as a basis of a 
doctrine, and this doctrine proclaimed as a law by the 
morgan's doctrinaires. 

The pronouncement of this so-called law is nothing 
more nor less than the taking of an effect for the cause. 
This cause is the instinct of self-preservation. We hear 
much idle talk of buying human service, of buying labor 
in the market. Let us go back of this and discuss the 
subject that comes before all, both in order of time and 
importance, namely, the subject of buying a livelihood. 
That was the first and original subject of bargain and 
sale between the gentile and the morgan. That is the 
subject first in importance still. It presents the question 
that lies at the root of all of the questions that confront 
the gentile to this day. When the gentile works for 
wages, he does so that he may live. He is buying the 
means of life, then and there, the rigamarole of money 
and business notwithstanding. He is paying for the 
means of life with his labor power. 



SUPPLY AND DEMAND 181 

Nature is most bountiful, and when her processes are 
supplemented by human effort, she yields forth more than 
sufficient, not only of the necessaries, but also of the 
luxuries, for everyone. Every sane human being will 
find pleasure in putting forth that effort when he knows 
that he will receive in full the fruits thereof. But the 
gentile is always confronted by the morgan, club in hand, 
blocking the way to nature's resources, and the way to 
work, demanding and exacting in full not only all that 
nature produces spontaneously but also all that she yields 
in response to the gentile's effort, supplementing her 
processes, all of that which the gentile's brain and hand 
produces of value in addition to nature's materials. Of 
all this the morgan gives back to the gentile only as much 
as he has to give back to make the gentile willing to 
work for his livelihood, rather than go without. 

In the exercise of his monstrous power, the morgan 
restricts the volume of production to the amount only 
necessary for his market. The restriction of this sup- 
ply to the amount just necessary to keep the process 
going makes it easier for the morgan to hold the gentile 
down to the limitation set for him, and to render him 
obedient and subservient. 

The gentile, like the birds of the air, is born into a 
world abundently stocked with the free goods of nature, 
to sustain life in happiness. Besides that, there is a vast 
store and accumulation of learning, wisdom and experi- 
ence, of a long line of ancestors, to serve us in multiply- 
ing many times the benefits and sustaining powers of 
that which nature furnishes spontaneously. All of this 
is naturally for the free use of everyone. All of this 
constitutes our livelihood. But when the gentile reaches 
out tof take of that sustenance supplied for him by nature, 
as the birds of the air take it, he finds himself stayed 



182 WHY THE CAPITALIST ? 

by the morgan and the morgan's church and state, laws 
and conventions. 

The gentile finds that he must buy that which is al- 
ready his, but of which he is being forcibly deprived. 
He must pay for his livelihood. He must buy it of the 
morgan. The gentile is empty handed, shorn of all his 
inheritance. All that he has now is the power to work, 
and the continuance of this power is dependent upon 
his getting the means to continue life. So, if he desires 
to live, he gives his fealty to the morgan, serves him and 
receives the means necessary to sustain his life. 

The meagerness of the means of life that the gentile 
is willing to work for is dependnt upon the strength of 
his desire to live, and his ideas of the living thiat is 
worth while working for. With some men the desire for 
life and the fear of death is so much stronger than with 
others, and the standard of a life worth while working 
for so much lower that they are consequently willing to 
work more and receive less. The African negro had a 
stronger desire to live and a greater fear of death than 
the American Indian. Therefore the African negro was 
made a willing slave. He would work hard for his 
livelihood and accept a small measure of his share of 
nature's life sustaining goods. Th€ living that it was 
worth his while to work for was a comparatively poor 
living. The attachment to life and the fear of death 
were much weaker with the American Indian. There- 
fore the American Indian was practically worthless as a 
slave. He did not consider a slave's life worth while 
working for, so the Indian refused to work for it. He 
also refused to recognize title and property as having 
any right to stand between himself and what he needed. 
As a consequence the Indian was on the war-path a 
great deal of the time, but he was never a slave. His 



SUPPLY AND DEMAND 183 

mind never came under the domination of the morgan's 
pulpit, press and state. 

So long as the life-giving things and the means of get- 
ting them are the private property of the morgan and. 
can be locked up by him, the greatness of the supply of 
those things will not and cannot affect the price that the 
gentile is compelled to pay in services for his livelihood. 
Neither the largeness nor the smallness of the morgan's 
pile of accumulated wealth can in itself increase or de- 
crease the gentile's desire to live. The greater the mor- 
gan's pile the more it might impress the gentile with the 
utter hopelessness of his situation. But this would not 
make wealth easier for the gentile to get. It is quite to 
the contrary. The greater the pile of wealth that is 
heaped up, the more difficult it is for the gentile to get 
it. So that we really find that this law of supply and 
demand works the other way than that claimed for it by 
its votaries. Cheapness in its final analysis means easi- 
ness to get, and the greater the amount of wealth there is 
in the world, under present conditions, the harder it is 
for the gentile to get any of it. Hence when we apply 
this so-called law of supply and demand to the whole 
situation and embrace all wealth, we find that the greater 
the supply, the higher the price that the gentile must 
pay for any portion of it. In fact, when it comes to 
getting any more than a livelihood, the price becomes 
practically prohibitive. 

The gentile's instinct of self-preservation is not de- 
pendent upon the amount of goods that the morgan 
holds in his grip. 

There is but one rule, or "law," if we please to call it 
such, and that is that the more completely the morgan 
can bar out the gentile from the free goods of nature, 
the greater the amount of subservient work he can exact 
from the gentile, subject to the one limitation, that the 



184 WHY THE CAPITALIST ? 

livelihood of the gentile be not rendered so miserable as 
to seem not worth while living and working for. 

The shutting off from the gentile of the sustenance 
furnished for him by nature is no different in principle 
than the opening of his arteries would be or the stopping 
of the flow of his blood through his body. The atten- 
tion might then also be diverted from the criminality 
of the act by using the same Mephistophelian argument 
that all of the resulting discomforts of the gentile were 
due to the workings of the '*law" of supply and demand. 

What is the difference either in principle or effect be- 
tween muzzling the ox or locking up all the provender? 
Could it be said seriously that the hunger of the ox was a 
legitimate result of the operation of the law of supply 
and demand? 

The wolf in the fable was invited to a banquet by the 
stork, and found a most bountiful supply of delicious 
viands. But these good things were all contained in 
narrow, tall vases. Only the stork's long bill could 
reach into the recesses of this strange kind of table 
ware. So the wolf, being a law-abiding wolf and an ob- 
server of the proprieties, went away more hungry than 
he came. Now it will be conceded that the supply was 
sufficient, as well as the demand. In fact, the supply far 
exceeded the demand. But that did not cheapen the 
price of the victuals for the wolf. They were just as 
difficult for him to get, legally and politely, as if there 
had been no supply at all. Hence they were very high 
priced for the wolf. 

If a small piece of cheese should appear in the same 
cage with two hungry rats, we should have an instance 
of a small supply and a large demand. The resulting 
scene would without doubt afford a very illuminating 
illustration of the operation of the so-called economic 
"law" of supply and demand. 



SUPPLY AND DEMAND 185 

Strangling a baby with a garter, in acceptance of this 
"law" would be a comparatively innocent act. The case 
would simply be that the supply of air for the baby's 
lungs did not equal the demand of the baby's life. 

No more subtle device for avoiding consideration of a 
prime, actuating and moving cause, and keeping the 
mind busy with secondary and subsidiary forces and in- 
struments, has ever been conceived than this so-called 
economic "law" of supply and demand. Following the 
same leading principle, it might be said that a man 
pushed over a precipice by another came to his death 
through the law of gravitation, or that a man shot to 
death, met his end by reason of the expansive property 
of gases generated in the barrel of a gun ; and that these 
are natural laws that no human power can obviate. 

Th€ only object or purpose of promulgating such a 
"law" as this so-called "law" of supply and demand, is 
to give a specious and misleading explanation and ex- 
cuse for expropriation and exploitation. In the chapters 
on private property and on wages it was pointed out that 
by the expropriation of all the resources of nature and the 
means of production, the rest of mankind, the gentile, 
have been placed in the position of the man in prison, or 
the rat in a cage ; for, to be excluded by force from the 
natural means of livelihood is no different in principle 
than to be imprisoned in a cell. It remains only a ques- 
tion of how much a man will endure for the sake of hold- 
ing on to his life. If life is so sweet to him that he will 
endure anything to keep alive, then he will submit to 
any terms that his jailer or master will impose, so long 
as he gets enough to keep alive. 

In the discussion had on the subject of value, three 
propositions bearing on this subject were clearly estab- 
lished. One is that the free goods of nature have no value 
whatever in an economic sense. They have usefulness 



186 WHY THE CAPITALIST ? 

without value, are invaluable, in truth. The second is 
that in an economic sense nothing has value save as that 
value has been created by labor. The third is that the 
only equivalent of the value created by labor, is a like 
amount of productive efficient labor. Two conclusions 
are therefore unavoidable. The one is that the so-called 
"law" of supply and demand can have no effect upon a 
value that does not exist, as in the case of the free goods 
of nature. The other is that this so-called "law" cannot 
determine the measure of the value created by labor, as 
that value can be, and is determined only by other labor. 

It should not be necessary to spend time discussing 
the effect of supply and demand on rare articles not re- 
quired to meet general human needs. The possession of 
these, whether by Tom, Dick or Harry, is not of the 
slightest importance to human society. The Cullinan 
diamond may remain in the Tower of London, or it 
might be sent back to South Africa, or thrown into the 
sea, without in the slightest degree affecting the welfare 
of humanity. 

As to the competition between Tommy Numskull and 
Percy Hollowhead resulting in the enormous price paid 
for some monstrosity of a dog, it is not worthy of much 
consideration as bearing upon the controversy. They are 
morgans. Theirs is nothing but an artificial situation, 
here, produced by themselves as a result of their artificial- 
ized minds, though we may admit that it is not product- 
ive of any direct baneful results upon society. The indi- 
rect baneful results of debasing their own minds that 
might be employed in better things, and the consump- 
tion of labor power in the production of deformed dogs 
and such things is slight compared to other things. To 
compare for a moment the consideration of this sort of 
clap-trap with the consideration of the wants and needs 



SUPPLY AND DEMAND 187 

of the mass of human kind is only to trifle with a serious 
subject. 

Yet here it might also be pointed out that it was the 
instinct of self-preservation that led the worker to dis- 
cover and dig up the diamond, to cut and polish it, to 
breed and produce the queer dog with undershot jaw, 
crooked ears and mangled tail, so that he might facili- 
tate the getting of his livelihood by catering to the whims 
of the morgan. The worker does it for a living. 'What 
does he do for a living?" is a very common question, 
and is strictly accurate and to the point. Whether the 
worker produces diamonds, breeds abnormities or piles 
up enormous fortunes for the morgan, it is all the same. 
He has to satisfy the morgan's whim. He has to buy his 
livelihood from the morgan ; has to pay a price that will 
satisfy the morgan's whim in a form and manner that 
will meet the approval of the morgan's freakish mind. 
The whimsical turns and twists and competitions of the 
morgan's market do not and cannot change, either the 
principles involved or the results. Oin the whole, it 
simply presents one phase of the present condition of 
human society in which the worthy is subjected to a 
slavish subserviency to the unworthy. 

The morgan can no more escape responsibility for the 
torture and murder of the gentiles under his industrial 
tegime on the plea of his so-called law of supply and 
demand than the infanticide can escape conviction of mur- 
der for strangling the baby on the plea that all he did 
was to perform the perfectly innocent act of shutting oft* 
the baby's air, and that the 'law" of supply and demand 
did the rest, and was therefore the sole cause of the 
baby's death. 

After all is summed up it cannot make any difference 
whether we call this thing labeled supply and demand 
a law or by any other name. This seems irrefutable, 



188 WHY THE CAPITALIST? 

that under present conditions it is nothing more nor 
less than an instrument wholly in the control and own- 
ership of the morgan to oppress and exploit the gentiles. 

The morgan rests his case on his so-called "law" of 
supply and demand. Thus he tells the gentile to at- 
tribute his situation to the agent and instrumentality by 
which the system is perpetuated, rather than to the sys- 
tem or to the morgan's predatory disposition. Insofar as 
the morgan and his panders have succeeded in this, their 
plan of a ''higher education," the gentile has been kept 
busy clawing at the end of a torturing prod. 

It is extremely doubtful if an imprisoned tiger would 
spend his time or break his teeth on the end of the iron 
rod with which he is being prodded by his tormentor, if 
it were not for the iron bars of his cage. The tiger has 
not been "educated" in the morgan's school of political 
economy. 

The morgan's Supply and Demand dogma, reduced to 
its absurdidty, gives us this result: 

Say that the needs of the world demand and that the 
world normally produce 10,000,000,000 bushels of wheat 
normally of the value of, say, 75 cents a bushel, making 
$7,500,000,000,000; and that in a poor year only 8,000,- 
000,000 bushels are produced. There would be a short- 
age of 2,000,000,000 bushels. This would increase the 
value of wheat to say $1.00 per bushel. That would give 
the world $8,000,000,000 in wealth. Here we would have 
a gain of $500,000,000 in the world's wealth as a result 
of the shortage in the wheat crop. 

The next year, with the needs of the world demand- 
ing the same amount, there are produced say 12,000,000,- 
000 bushels. This would certainly send wheat "values" 
down. If they went down as low as 50 cents a bushel, 
we should see the world's wealth in wheat represented 
by $6,000,000,000. Thus the anomalous situation would 



SUPPLY AND DEMAND 189 

be presented that the world with 12,000,000,000 bushels 
of good wheat in its bins would be $2,000,000,000 poorer 
than it was with only 8,000,000,000 bushels. If the wheat 
crop had been 14,000,000,000 bushels and all other crops 
equally abundant, the world would be poverty stricken. 
But if the farmers all united and wantonly destroyed 
half of all that was produced, prosperity would be with 
us again, the 7,000,000,000 bushels of wheat would jump 
at once in value to about $1,25 a bushel making the 
wheat crop worth $8,750,000,000. All of the rest of the 
agricultural products left to the world from the great 
destruction would go up in about the same measure. 
How gloriously rich the world would be because of the 
resulting high prices ! 

Take diamonds. If every pebble in every gravel de- 
posit were suddenly turned into a diamond, all of the 
so-called wealth in diamonds would disappear at once! 
If, however, the supply of diamonds were diminished 
again, by casting all of the newly found gems into the 
sea, why all our wealth would again be restored in- 
stantly ! 

Since in times of stress, famine and shortage, all 
necessaries go up in prices, we are always richest when 
we have been visited with late frosts, drouths, locusts, 
crop destroying hail-storms, floods, etc., etc. If we wish 
to increase the value of city houses and send rents up, 
all we need do is to burn down half the town or arrange 
to have a cyclone strike it, and the national wealth will 
be increased at once without the driving of a nail or the 
laying of a brick. 

Under this morgan theory of supply and demand, the 
greater the supply of useful things we have, the poorer 
we are, and the less the supply of goods at our com- 
mand, the richer we are. It is all in the thinking. 



CHAPTER XVII. 
MONEY. 

We are accustomed to have it said that money is a 
medium of exchange. The expression is strictly correct, 
yet withal, most misleading, because the mind becomes 
extremely prone to suspend all further inquiry as soon 
as the expression is received. All further investigation 
is abandoned at once. Furthermore, the statement that 
money is a meditmi of exchange carries with it two sug- 
gestions that are both false. One of these is that money 
is not anything else, that it possesses no other qualities, 
properties or functions. The second is that it is the only 
medium of exchange that there is or can be. Both of 
these illusions cause far-reaching mental confusion. 

That which is called money, originally, was not money 
at all, as the term money is now understood. First it 
was only a thing of some usefulness, a good. When 
the possessor came to exchange it for some other thing, 
it took on another quality and function, that is, it be- 
came also an article of barter, to trade ofif for something 
else. This was quite separate and aside from the quality 
which it already possessed of usefulness to its owner. It 
took on a second, but extraneous, usefulness, as it were. 
This second usefulness differed quite distinctly from the 
first. The good became a means of getting some other 
good. The difference was somewhat like that of throw- 
ing an apple into a peach tree to knock down peaches. 
That would be using the apple not as an apple, but as a 
missile to get peaches. Using a fire poker as a club is 
another illustration. The poker still remains a poker. 
The baby carriage when used to bring home groceries 

190 



MONEY 191 

does not thereby become any the less a baby carriage. 
When goods come to be considered as things to be traded 
for other goods they also naturally come to be regarded 
with a different aspect than before. It is no longer the 
question what can I do with them? but it is what can 
I get for them, and how much can I get for them? Par- 
ticularly the latter. 

The thing that a commodity is exchanged for is merely 
a good in the hands of the new owner if he takes it for 
its inherent usefulness for himself. But if he takes the 
new article only to exchange it again for still something 
else, then it too is a commodity. It then becomes also 
a mere medium for the exchange of the original thing 
possessed for the thing ultimately wanted. If the article 
is one that is readily exchangeable for things wanted and 
therefore is generally taken in exchange, it becomes a 
favorite commodity and therewith a generally used me- 
dium of exchange. But it does not thereby lose any of 
its other or previously possessed qualities, even though 
those qualities be lost sight of in the greater attention 
paid to that of the medium of exchange. The apple 
remains an apple, no matter how many times it be used 
as a missle, and the poker remains a poker no matter 
how many times it be used as a club. So too with the 
baby carriage. 

When a commodity becomes a medium of exchange it 
becomes at the same time a means of admeasuring the 
values attributed to other commodities in exchange, by 
having the desireableness of owning it brought into con- 
trast and comparison with the desireableness ol owning 
those other commodities. It is thus made a measure. 
Nor does this alter any of its former qualities, for it is 
also merely an adding on. 

Last of all, this good which has gone through the 
process of evolution and taken on these aforementioned 



192 WHY THE CAPITALIST? 

qualities and functions until we see it is a general me- 
dium of exchange and measure of attributed value, has 
superimposed upon it still another office and function. 
This last is the result of legislation and constitutes the 
sole cause of all the artificialities attached to the subject. 
This last quality and function is that of a legal tender 
or medium of state-enforced quittance. The greatest 
number of functions performed by money is thereby 
reached. The subsequent evolution of money relates to 
the increase and decrease in importance of the respective 
functions and offices of money as compared with each 
other. 

Here we have then five distinct qualities and functions 
and therefore five distinct aspects of money, four of them 
the result of undirected development, and the fifth one 
the result of deliberate legislation. These should be well 
borne in mind and are therefore set forth as follows : 
I. A Good. 
II. A commodity. 

III. A medium of exchange. 

IV. A standard for admeasuring attributed values. 
V. A legal tender or medium of state-enforced quit- 
tance. 

The first pertains to goods held for, or applied to per- 
sonal use. The second is assumed by goods when made 
the subject of exchange. The third and fourth are as- 
sumed when the indirect or mediatorial method of ex- 
change is resorted to. The fifth is called the legal tender 
aspect or quality and comes into existence when the 
power of the state enters for the enforcement of quit- 
tances. This latter is a wholly artificial office, extrane- 
ously attached as it were, and altogether dependent 
upon legislation. It is a result of the spirit of force and 
coercion. It involves the expression of the war power of 
the state in collecting its own demands and in enforcing 



MONEY 193 

its judgments. But it is not an essential function of 
money as goods, or as a commodity, or as a medium of 
exchange or as an admeasurer of the attributed values 
of other commodities. 

The first four of the enumerated qualities and functions 
of the thing called money are not and never can be con- 
fined to money nor do they or will they ever depend 
for their continued existence upon legislation, so long 
as the institution of private property continues. They 
were naturally and spontaneously acquired with the com- 
ing in and development of the institution of private 
property. They are the unplanned and undesigned prod- 
uct of society as distinguished from state consideration, 
deliberation and legislation. 

The acquisition and exchange of commodities for 
profit constitutes the basis of the whole of the morgan's 
system of industry and business. Therefore exchange of 
commodities for profit constitutes practically the whole 
of its character giving activities. 

Many different commodities have served as media of 
exchange. In some regions it was live stock, in other 
regions dried fish, in other regions tobacco and in still 
other regions it was slaves. Cattle could be driven from 
place to place for the purposes of trade, the flesh furnish- 
ing food that could be made available at any time. Dried 
fish represented human effort and also served as food. 
Tobacco was always in demand in its region. The slave 
could easily be led from place to place to be traded off, 
and in the meantime, his labor power could be utilized 
either in personal service or in the production of surplus 
values. 

If one of our early ancestors owned something that he 
had no particular use for and could not find an owner 
of some desired article who was willing to trade with him 
for his article, he naturally would try to trade for some- 



194 WHY THE CAPITALIST? 

thing that he could more readily trade off again because 
of its useful qualities or attractiveness, and so use the 
latter article as a medium to get eventually what he 
was unable to obtain by direct exchange. Thus custom 
arose. Certain commodities, because more easily trade- 
able than others, became the favorite commodity, and in 
course of time were generally accepted as media of ex- 
change. This did not in itself involve any alteration 
in the nature of these favorite things themselves or in 
their functions and uses either as goods for personal use 
or as commodities for the purpose of direct trade or 
profit. It was merely the adding on of new and further 
offices and functions, and the extension of scope and 
activity. 

Gold and silver recommended themselves to man. 
They were ordinarily more difficult to wrest from nature 
than most other things. They therefore represented 
more human labor. They were easily transported, werq 
attractive to the eye, could be formed into articles of 
ornamentation. In a word, they were particularly allur- 
ing and afforded a splendid parade of acquired wealth. 
As naturally as a man had before that estimated the 
attributed value of a field, or a tent, or a house, in slaves, 
or heads of cattle, or dried fish, or tobacco, when custom 
brought gold and silver into vogue he readily estimated 
and computed the attributed values of these articles of 
trade in pieces of gold or silver. 

The temptation to debase gold and silver was always 
great because there were great profits to be gained by 
such debasement. Therefore states, to protect themslves. 
directly, and also indirectly through protecting their 
subjects in that respect, inspected gold and silver used 
as media of exchange, and struck these metals into disks 
of uniform weight and fineness, and impressed marks 
upon them so that the quantity and fineness of the metal 



MONEY 195 

in each disk or coin was thereby assured. Further as- 
surance was also offered by prescribing punishment for 
counterfeiting. This in itself did not give the final at- 
tributes of money to the coin, although it did, quite inci-» 
dentally and accidentally, as it were, give the name of 
money. 

In ancient Rome the first money was coined in the 
Temple of Juno. This goddess was also called Moneta. 
Hence the coin was called moneta from which our term 
"money" is derived. With the name we also inherited 
the holy mummery and mystery surrounding the subject 
that came from Moneta's temple. 

Our municipal governments inspect milk so as to pro- 
tect us from cheats and enable us to feel assured that 
the milk left at our doors in bottles complies with pre- 
scribed requirements both as to quality and quantity. 
Yet no additional quality, function or office is added to 
the milk thereby. The state also inspects other com- 
modities nowadays, supervises and marks weights and 
measures, and prescribes penalties for adulteration and 
falsification. All this is to protect us from being cheated 
as to the represented quality and quantity of those com- 
modities. So far, it is in principle no less and no more 
than the service performed by the state in striking off 
gold and silver coin. 

The state — and state here means ruling power — saw 
an advantage in demanding that levies of taxes and as- 
sessments be paid in gold and silver. Fines were made 
payable in the same material. The same rule was ex- 
tended to damages paid by one subject or citizen to an- 
other for injuries to persons or property and for breaches 
of contract. Here then we see the last function and 
office added which distinguishes money from all other 
commodities. The good, the favorite commodity, the 
medium of exchange and the measure of attributed value. 



196 WHY THE CAPITALIST ? 

now also becomes the medium of legally enforced pay- 
ment and settlement. 

One of the natural consequences of this new and 
additional quality and office now legally attached to the 
favorite commodity is that in contraversies over amounts 
and balances, the debtor finds it to his advantage to avoid 
the displeasure of the law and so tenders to the creditor 
the exact amount of the debt, in the good that is the 
very body of the favorite commodity, medium of ex- 
change, measure of attributed value and now also me- 
dium of enforced quittance or payment. The debtor 
tenders the full amount of the debt in state-minted coin. 
This act on the part of the debtor is a legal tender. The 
coin that answers the purpose of such an offer or tender 
is also called a "legal tender." This term may also be 
applied to the bills, or what is known as paper money; 
warehouse certificates, as it were, used as a convenient 
and economical representative of coin and redeemable in 
coin on demand. 

That gold and silver in the form of coin became a legal 
tender, that is, money in its more fully accepted sense. 
or that in later years gold coin with its equivalent of 
bills and certificates, became alone the real money, does 
not deprive either of those metals, whether in bars or in 
the form of coin, of any part or degree of the quality of 
a commodity. The additional office and function does 
not in the slightest degree change or alter the previously 
acquired and still retained offices and functions, any 
more than the attaching of an additional car to a rail- 
road train changes the office, function or nature of the 
earlier cars or of the locomotive engine drawing the train. 
However, it can be said in this connection, that the 
greater scope thus given to gold results in making it 
more prized; gives it a higher measure of attributed 
value than it otherwise would have. This is artificial 



MONEY 197 

and in part attributable to the private ownership of 
the gold mines and the machinery for mining gold. 

The gold contained in the coin, outside of the en- 
hanced attributed value which it gets by reason of the 
greater demand for it in the market, neither takes on 
nor loses a particle of the other qualities which it al- 
ready possessed, by reason of now being also a legal 
tender. The giving of another name to the coin, calling 
it a dollar or an eagle, is of no especial significance, ex- 
cept as already stated. The gold coin that is called 
money will not buy any more than the metal contained 
in the coin is estimated to be worth. When offered in 
large payments the gold is weighed, whether in bars 
or in the form of coin. Gold has no other element of 
real value than that contained in any other article. That 
is the value imparted to it by the expenditure of labor 
power in its production. Yet under the morgan's system 
of society, gold has an unreal and varying value attribu- 
ted to it. It is worth whatever can be gotten for it. 
That is the only pretense to a measure of its attributed 
value under the present system of society. That is 
equally true of all other commodities. The use of gold, 
in coin or in bars, as a purchasing medium, that is, as 
a medium of exchange, is no different in principle than 
the use of any other commodity disposed of in barter. 
If you give a gold coin, called a dollar, for a bushel of 
wheat, you are merely trading gold for wheat and the 
other man is trading wheat for gold. It is just as accu- 
rate for him to say that he bought a gold coin for a 
bushel of wheat as it is for you to say that you bought 
a bushel of wheat for a gold coin. It is a barter, and to 
speak of buying and selling is only to inject different 
names and terms. That makes of it a mere matter of 
words. If, to-morrow, you get two bushels of wheat 
for one gold coin called a dollar, the farmer can say that 



198 WHY THE CAPITALIST ? 

the gold was dear and you can say that the wheat was 
cheap; or vice versa. For all of that, the amount of 
true value contained in the bushel of wheat, as well as 
the amount of true value contained in the gold coin, re- 
mained unchanged. 

The late John P. Morgan said to a committee of Con- 
gress that only gold is money. Having in mind the 
legal-tender potency given by legislation to gold that has 
been inspected and tested by the state and struck into 
uniform pieces called coin, it may be conceded thai 
what Mr. Morgan said was entirely true. But it was 
entirely technical also. Mr. Morgan did not say that 
gold was the only substance that could be money. Nor 
could he say it. ISfio doubt he thought that gold was 
the best thing that nature ever produced to serve as 
money. That would be merely his opinion. But the 
state, through the exercise of the same power to decree 
what substance shall be required to discharge an obli- 
gation could just as well make platinum, or copper, or 
lead, or salt into money. 

But in the domain of political economy, yes, in the 
everyday affairs of life, in the most important and far- 
reaching matters, in the things and considerations that 
make and destroy nations and sway society, and despite 
all the legislation that has ever been had, Mr. Morgan's 
sage utterance fades into thinnest nothingness when 
met by the effulgence of a most casual remark of the 
gamin on the street, who, on seeing a limousine drive 
by, said: "Dat old guy's got all kinds o'money." That 
uncouth child of poverty, with a rag of human speech 
found in the gutter, gave a most cogent expression to 
the essence of all that there is in money as well as all 
that there is In the whole field of political economy. The 
child did not see any money, but his expression told that 
his mind had taken note that the man in the limousine 



MONEY 199 

owned many things of many kinds, things of attributed 
value, things that were readily exchangeable for all 
kinds of other things of attributed value; that the pos- 
session of all these things gave the man in the limousine 
a great power and enabled him to have also huge sums 
of money at his command, else he could not have pos- 
sessed the evidences of wealth. The power to command 
is all there is in ownership. Terms and terminology, 
media and method, had not yet darkened the child's 
natural mind. He knew the what, though he did not 
know the artificial how of the morgan's world. 

Gold long ago became too cumbersome and expensive 
to serve directly and exclusively as a medium of ex- 
change. Gold therefore withdrew, to a very large ex- 
tent, from circulation. In many of the largest and busi- 
est centers, gold has dropped out of circulation alto- 
gether, appearing only for purposes of show to make 
Christmas or birthday presents with, and then retiring 
quickly again. Pieces of paper, more or less artistically 
designed, have taken the place of gold as a medium of 
exchange. These are much in the nature of warehouse 
receipts. Like gold coin, they pass ownership with de- 
livery. Even though they be stolen, the innocent taker 
of them from the thief for a valuable consideration, gets 
a good title. This must be so; trade demands it. The 
paper also takes the very name of money, is redeemable 
in gold coin on demand and circulation as, and per- 
forms all of the offices of, a medium of exchange in the 
place of gold coin. This paper money is much more 
convenient to count, handle and transport, particularly 
because of the large denominations in which it can be 
issued. It does not depreciate by abrasion. For these 
reasons it is much cheaper. Everybody has confidence 
in this paper money; everbody feels assured that it can 
readily be exchanged for things that are wanted. This 



200 WHY THE CAPITALIST? 

is because it is a favorite commodity. 

There is no state law, and can be no law to compel 
anyone to give up to another anything that he has, just 
for money, paper or gold, or to render service. The ex- 
ception that we find as to public corporations rests upon 
the public franchise granted upon those conditions. H© 
gives it up for paper money because paper money has 
come to be a medium of exchange; and he is confident 
that any number of other people will voluntarily give up 
to him also other things that they have for this paper 
money. So he willingly gives up things he has for 
pieces of paper, in themselves of no practical value, be- 
cause he knows that be can give and others will take 
that paper in exchange for other things. Thus the paper 
becomes a medium for the exchange of other things that 
have or are regarded as having value. , These are the 
things tbat we are really concerned about and wish to 
exchange. The paper money facilitates the exchange 
and that is the only reason why we care for the paper 
money. 

It is true that the efficiency of paper as a medium of 
exchange is dependent entirely upon confidence. That 
is true of every medium of exchange. It is true of gold. 
It is true of every commodity. Let gold lose its power 
to get other things in exchange and it will cease at once 
to be a medium of exchange. Let a mountain of pure 
gold suddenly appear and gold coin will at once be re- 
fused by all who have things to sell until the mountain 
becomes private property, the output of gold restricted 
and the fad for gold revived. As to commodities in gen- 
eral, it is safe to say that the merchant would never 
lay in a stock if he were not confident that somebody 
will again buy enough of it from him so as to give him a 
profit. 

As long as confidence in paper money is maintained; 



MONEY 201 

it will perform its work of transferring attributed values 
back and forth. Destroy that confidence and the paper 
will no longer do its work. That confidence is now 
upheld by keeping on hand a very small amount of 
gold compared to the paper and other token money in 
the shape of silver, nickel and copper coin that it must 
secure. This modicum of gold holders of paper money 
may see if they have a mind to. They can also take it 
if they really want it for their paper money, provided, 
however, that there are not too many that want it. 
But, practically, no person wants it A much smaller 
quantity, say one per cent, would answer under such 
conditions. In fact, if nobody wants the gold, there is 
no good reason why a single gold coin should not answer 
every purpose, so long as the policemen could keep the 
line in order as the people file past to have a look at their 
gold! 

Anything else of attributed value would answer the 
same purpose just as well. Platinum would do, or wheat, 
or corn, or cotton would do, whether in the raw state or 
manufactured, i. e., coined ; brick and stone, and steel 
would do ; steel rails, steel wheels or other wheels would 
do; houses, railroads, steamships, mills, mines or farms, 
would do ; bread or meat, clothing or shoes would do. It 
would be only a matter of keeping these articles on hand 
and up to their full attributed value. We shall see how 
this is actually done at present when we come to con- 
sider the subject of banking. All of those forms and 
things of attributed value, perform to-day the office and 
function of giving and upholding confidence in another 
medium of exchange so extensive in its reach and im- 
portance that money as a medium of exchange is a puny 
thing in comparison. All the gold in all the vaults plays 
a comparatively small role as a medium of exchange 
to-day. But this relates to banking and we shall take 



203 WHY THE CAPITALIST ? 

that Up in another chapter. To say that values to be 
exchanged cannot give security to paper by which the 
exchanges are affected is an absurdity. Exchangeable 
values are the principals. Gold coin is simply the 
deputy, functioning as a medium of exchange to support 
and inspire confidence in paper acting as another medium 
of exchange. The deputy is skipped in the largest trans- 
actions every day and many times every day so far as his 
claim to act as a medium of exchange is concerned. 

It w^ould be an unjustified assertion to say that the 
principal values that are themselves exchanged by the 
use of media of exchange cannot be readily transferred 
or divided up into the necessary fragments required by 
trade. The fact is that trade does not require the kind 
of handling and dividing up that v^ould here be inferenti- 
ally claimed. It is a long time since we have used gold 
dollars in business. The smallest gold coin ordinarily 
seen is the five-dollar piece. Yet we have had no difii- 
culty in spending less than five dollars at a time. The 
man who has only one copper cent cannot redeem it in 
gold. Before he can do that he will have to get 499 
other copper cents, with which to get a five dollar gold 
coin. 

Aside from the artificial and law-supported legal ten- 
der aspect of it, money is being fast reduced to a single 
one of the four separate and distinct, naturally acquired, 
functions. It is being more and more restricted in scope 
to the function of a standard for admeasuring attributed 
values. It is a poor, wavering and fluctuating standard 
at that, and it is becoming worse all the time. It is a 
yardstick of very changeable length, for the most part 
contracting to a shorter reach. In the very poorest of 
fashions, money is used as ja. means of admeasuring the 
attributed values of commodities brought into exchange 
after the manner established by trade. The reason for 



MONEY 203 

this is that real values are not admeasured. Only the 
fictitious values of commodities are admeasured. The 
value in an article consists of the average time of simple 
labor power necessarily expended in the social produc- 
tion of that kind of an article. This could easily be 
standardized under a sane and reasonable social system, 
if it were deemed desirable. But under our present social 
chaos there is no standard of valuation. Everything is 
in the market scramble. That is the theory of "values" 
under the morgan. The greatest dishonesty attends the 
practice of even that theory. The morgan, who holds 
and controls the resources of nature and the means of 
production, does not scramble. He sits tight. He can 
be dignified and respectable. The scrambling is done 
by those who are compelled to get a living. The morgan 
has control of the yardstick called money. He can 
make the yard a long one or a short one as he likes. 
It is to his interest to make it grow constantly shorter. 
To have things dear suits his purpose. All the move- 
ments of the morgan are masked and the gentiles in their 
strivings and competitions have their attention drawn 
away from the points of their expropriation and their 
exploitation, and are worn out in senseless contentions 
over the money prices of commodities. 



CHAPTER XVIII. 
THE BANK AS AN AGENCY OF EXCHANGE. 

The two functions of money (a) that of a medium of 
exchange and (b) that of a measure of attributed values 
are both products of evolution. But evolution never 
stops. It is constantly sloughing off and modifying the 
old and at the same time adding the new, changing the 
emphasis, transferring the importance from one feature 
to another, until the object appears as something new. 
Yet the new comes in on us in such a way that it is 
likely to be unnoticed in the coming. 

The corporeality of money — true money, gold, as our 
financiers say — long ago began to decline in its activity 
as the medium of exchange, leaving that office to be per- 
formed more and more by the servants called tokens or 
money. In time these servants had to begin to give 
way also. There were too many of them. *i ne entourage 
became too large, unwieldy, blatant and vulgar. So 
even paper money became too bothersome. It required 
too much work to count and carry and protect against 
thieves, fire, and dirt and germs. It is too much exposed 
to the danger of being lost. If lost or stolen the title of 
it will be gone as soon as it gets into the hands of inno- 
cent holders. It cannot be pursued by the owner ob 
retaken from innocent holders who have in good faith 
parted with value for it, as can be done in the case of 
a lost or stolen coat or horse. And lastly, but by no 
means unimportant, the handling of money in consider- 
able sums has lost the flavor of fashion. The odor has 
become tiresome, as it were, and even offensive. It has 
long since come to be very much more within the canons 

204 



THE BANK AS AN AGENCY OF EXCHANGE 205 

of Style and respectability to make quittances and ex- 
change of value by means of checks on the bank. It is 
considered quite rustic and boorish to-day for one in- 
dividual to pay over to another any considerable sum of 
money, be it gold or paper. It has gotten to be quite the 
formula in preparing to close real-estate transactions to 
ask: "Would you prefer cash or a certified check?" and 
the answer almost invariably is: "A certified check, by 
all means, if you please" ; or a draft on New Yerk or some 
other financial center is asked for. 

Those of us who enjoy the confidence of the landlord 
and the shop-keeper prefer to make our quittances by 
means of checks on the bank, and we look with pity upon 
the line of worn faces and bent backs at the tax gatherer's 
window awaiting their turn to pay their taxes or water 
bills in cash. A check on a bank is so much easier, 
quicker and safer, both to the remitter and the receiver, 
and it adds much more to one's prestige than the hand- 
ling of dirty money. 

The payee deposits the checks received by him during 
the day in his bank in the vast majority of instances. 
If his bank is the one on which the check is drawn, the 
amount is written on the credit side of the payee's ac- 
count and on the debit side of the drawer's account and 
that transaction is thus closed. If the check is drawn 
on some other than the payee's bank the payee deposits 
it in his own bank in exactly the same manner. The 
clerk in the payee's bank gathers up, assorts and tabu- 
lates all the checks on other banks received in this way 
and sends them every day to an appointed place at an 
appointed time where the messenger meets like mes- 
sengers from other banks in the same city or district. It 
is of no importance where this place is. It could be in a 
bar-room or on the street corner. It is usually in some 
convenient place and is called the clearing house. The 



206 WHY THE CAPITALIST ? 

name is purely technical and is a blind. Most people 
do not understand what is meant by it. The name 
recommends itself as a convenient thing to confuse the 
minds of the iminitiated. It is part of the morgan 
system to give confusing names to things. This so- 
called clearing house is nothing but a swapping place 
and it ought to be so designated. People not informed in 
such matters would not then get false impressions from 
a hollow highi-sounding name. 

When the different bank messengers meet at the 
swapping house they simply swap shecks, each one re- 
ceiving from the other the checks drawn on his own 
bank. Each takes the checks so received back to his 
own bank. There the checks are verified. Then their 
respective amounts are written on the debit side of the 
accounts of the respective drawers, if the amount on 
the credit side is not thereby exceeded. If the credit 
side is not good for the amount, the check is sent back 
dishonored to the bank from which it was received in tbe 
swapping process, unless the bank officer regards the 
drawer as of sufficient financial responsibility to honor 
the check on the drawer's general credit. In the latter 
case the check is charged to the account of the drawer 
who is notified of the resulting shortage in his account. 
This shortage is called an overdraft. 

A clerk in each bank computes the sum ot the checks 
received daily by way of the clearing house. The sums 
of the dififerent consignments of such checks are set ofif 
against the sums of the checks on the other banks, 
respectively. When that is done each bank owes or has 
a claim for whatever difference may be found to remain. 
Each bank may be owing a balance to one or more of 
the other banks. At the same time it may have one or 
more balances coming to it from still other banks in the 
swapping combination. These balances may be paid off 



THE BANK AS AN AGENCY OF EXCHANGE 207 

by checks or orders given on debtor banks and so ad- 
justed through further credit and debit entries, or 
through a system of orders on a common fund main* 
tained by the banks that are parties to the swapping 
arrangement. These orders on the common fund are 
called clearing house certificates. 

The Pujo Committee of the House of Represenatives 
in its report speaking of this simple swapping arrange- 
ment of the banks, says : "At the beginning of every busi- 
ness day each member presents at the clearing house all 
checks against other members deposited with it up to 
the close of business of the preceding day. Accounts are 
stated and in the afternoon every debtor member brings 
the amount due from it to other members to the clearing 
house, which on the same day pays it over to the credi- 
tor. The advantage of this system over the archaic 
practice of each bank separately making its collection 
over the counter from every other bank is incalculable. 

"To reduce the risk and labor of daily carrying through 
the streets large amounts of money necessary to pay the 
balances due from and to each other the members of the 
clearing house association deposit with it coin and cur- 
rency other than bank notes and in return receive certifi- 
cates in stated denominations payable to any member. 
These are used by members in settling with each other at 
the clearing house." 

Thus we see that the banks have in actual practice and 
effect become to a very large extent the method and ma- 
chinery of swapping attributed values during the periods 
of normal business activity, and that the clearing house 
is simply a place where the swapping system is extended 
and made more effective. 

As a result of all this, a relatively small amount of money 
is used as a medium of exchange. Money has to that 
extent lost the function of a medium of exchange. This 



208 WHY THE CAPITALIST ? 

function is accordingly being supplanted by the swapping 
of attributed values through the banks and their extended 
swapping combinations called clearing house associations. 

Only the terms of money remain to function as measures 
of attributed values. The great volume of exchange of 
attributed values is effected by means of a system of book- 
keeping operated by a corps of poorly paid laborers of 
little skill or understanding, in the employ of the banks 
and clearing houses. 

The extent to which attributed values are exchanged 
without the use of money, that is, through offsetting of 
accounts, is in a measure indicated by the report of the 
Pujo Committee. That report says: 

"In 1911 checks to the amount of $92,420,120,091, aver- 
aging $305,016,897.99 daily, were collected through the 
New York Clearing-House Association. This required but 
half or three-quarters of an hour morning and afternoon 
and the use of but $4,388,563,113.05 of actual money, aver- 
aging $14,483,706.64 daily, thus requiring the exchange of 
but 4.7 per cent of the money that would otherwise be 
involved in these transactions." 

Thus over 95 per cent of this vast aggregation of ex- 
change of values v^as affected by a direct swapping of 
credits in the various banks, all done by clerks perform- 
ing merely routine services. The remainder, as we have 
already seen from the quotation from this committee, was 
also adjusted by a further swapping of credits on the 
books of the clearing house by means of clearing house 
certificates. 

The report of the United States Comptroller of the Cur- 
rency for 1912, page 774, gives a comprehensive statement 
of the transactions of the New York Clearing House, year 
by year, from 1854 to 1912. This statement is valuable 
in showing the phenomenal growth of the system of swap- 
ping attributed values through simple bank book-keeping, 



THE BANK AS AN AGENCY OF EXCHANGE 209 

and the small amount of cash required to adjust balances. 
To illustrate, it is sufficient to take the five year periods : 

Average Percentage 

Daily of Bal. to 

Year. Clearings. Clearings. Clearings. 

1854 $ 5,750,455,987 $ 19,104,505 5.17 

1859 6,448,005,956 20,867,333 5-64 

1864 24,097,196,656 77,984,455 3-67 

1869 37,407,028,987 121,451,393 2.99 

1874 22,855,927,636 74,692,574 5.62 

1879 25,178,770,691 84,015,540 5.56 

1884 34,092,037,338 1 1 1,048,982 4.47 

1889 34,796,465,368 114,839,820 S.05 

1894 24,330,145,366 79,704,426 6.54 

1899 57,368,230,771 189,961,029 5.37 

1904 59,672,796,804 195,648,514 5.20 

1909 99,257,662,411 326,505,468 4.22 

I912 96,672,300,864 319,050,498 5-22 

The Comptroller, on page 776 of this report, gives a 
comparative statement of the clearing houses of the 
United States, 151 in number, for the years 1911 and 1912. 
From this it appears that the clearings for 1911 v^ere 
$159,508,005,000, and for 1912, $168,506,362,000, an in- 
crease of $8,998,357,000. 

Besides the foregoing clearing house transactions, there 
is the great number of transferences of attributed values 
back and forth by checks where the payee deposits his 
check in the bank on which it is drawn. These, of course, 
do not have to be swapped. They fulfill their mission the 
moment they are credited to the payee on the bank's books 
and debited to the drawer. 

A bank check is a very simple document upon its face. 
Its words are very simple and in themselves not calculated 
to deceive. "To the Big National Bank : Pay to the order 
of John Jones, One Hundred Dollars," dated and signed. 
Surely such an innocent looking instrument should not 
be the ground-work of any deception upon anybody. As 



210 WHY THE CAPITALIST ? 

between the immediate parties to the instrument it is not. 
As to its effect upon the general understanding of banks 
and banking it is most misleading. It is an extremely 
technical instrument. Based upon what we now know 
about the clearing house, it is intrinsically correct to the 
extent of less than five per cent. Only five per cent of it, 
on an average, is paid by the bank. The remaining 95 
per cent is credited to the payee on the bank's books. No 
money whatever having changed hands. 

If the checks were in some such words as these: "To 
the Big National Bank : Credit John Jones with an amount 
of value expressed in terms of money as One Hundred 
Dollars and charge my account with the same amount; 
or if Mr. John Jones becomes distrustful of the banks, 
then band to him the amount of his claim in money and 
let him go," dated and signed, it would express the true 
nature of commercial banking. That is what it amounts 
to in practice. In over 95 per cent of these check transac- 
tions, measured in dollars, John Jones is simply credited 
with the amount of his check, and the drawer of the check 
debited, and in less than five per cent of them, also meas- 
ured In dollars, does John Jones demand the money. There- 
fore, money serves as a medium of exchange in less than 
five per cent of the bank's transactions. In more than 95 
per cent of them the attributed values are transferred by 
means of the instrumentalities of the bank and without 
any money functioning as a medium of exchange. The 
office of money is only that of admeasuring attributed 
values. 

It has become one of the strong canons of business ethics 
to trust the banker implicitly and not to call for the actual 
cash to any greater extent than is absolutely necessary. 
This ethical teaching is being constantly impressed upon 
everybody reachable. 

The result of the development of banking and the general 



THE BANK AS AN AGENCY OF EXCHANGE 311 

confidence in the banker is that ordinarily the volume of 
trading through the swapping methods afforded by the 
system of banks and clearing houses so far as any estimate 
can be made is about twenty times the amount effected by 
the passing of money as a medium of exchange. This is 
certainly a great advance in efficiency. One would think 
that the immense saving would redound to the direct benefit 
of those owning the industries, the shops and the market 
places. But it does not. 

The morgan in the guise of the banker has appropriated 
this method and machinery, evolved by the whole human 
family, and uses it most effectually in exploiting the ex- 
ploiters. It has resulted in this, that the banker not only 
"does business" on a much larger amount of other people's 
money, but the business that he can do, if not restrained, 
by dealing in mere money terms amounts to about twenty 
times the amount of money he actually uses or has. Of 
course, the actual proportion can not be arrived at. A 
reliable inkling of it is aft'orded, however, by the testi-^ 
mony of the bankers before the Pujo Committee, from 
whose report quotations have herein already been made, 
and by the report of the United States Comptroller of the 
Currency. 

It is not at all to be wondered at that the morgan as 
banker, together with all of his servile press, turned all of 
the batteries against the Pujo Committee. 



CHAPTER XIX. 

COMMERCIAL BANKING— THE EXPLOITATION 
OF THE EXPLOITER. 

The swapping' of attributed values constitutes by far the 
greater part of modern commercial banking. It consti- 
tutes about 95 per cent of it. 

If the customers of the commercial banks were to collect 
into one place under their own control a sufficient amount 
of money to cover the five per cent approximately that is 
really needed to effect the swap of attributed values, deposit 
their securities in the amount required to maintain the 
needed confidence and hire a corps of competent clerks to 
keep the books and act as tellers and cashiers, the morgan 
would be dethroned as banker. There would be no more 
discounting of business in favor of the morgan for his 
so-called brain work in the running of a bank. The man 
in charge of a bank would then find himself in the position 
of a clerk getting a clerk's pay. 

The customers would, by such a proposition, be taking 
for themselves the benefits resulting from the evolution 
in trade and exchange that has followed down through the 
ages. Such an arrangement would put the banker on a 
wage basis. It would mean putting him where his clerks 
and trotters and tellers are now, namely, upon a basis 
where he could expect to receive for his work only enough 
to enable him to live in the station in life which he occu- 
pied, and that station in life would be the station of a clerk. 

Such a proposition on the part of the public would mean 
the abrogation of private ownership of the method and 
agency of exchange that has been evolved by our fathers, 
and still is being further evolved by the community at 

212 



THE EXPLOITATION OF THE EXPLOITER 213 

large. It would mean that there would no longer be the 
paying of huge sums to morgan bankers for that which is 
already our own and always has been our own. It would 
mean that the discount business would be ended. It would 
mean that there would no longer be any pretense of loaning 
where nothing is being loaned, where there is nothing to 
loan and where no loaning is necessary. 

At present a merchant or manufacturer goes to a bank 
"for a line of credit." He already has the credit. If he 
has not, then he might save himself the trouble of going 
to the bank. He has credit in goods, machinery, material 
or prospects, singly or in combination. In order to go to 
the banker he must first have quick assets, that is, he must 
have assets that can be disposed of quickly for money when 
his note matures, if not taken up by him at once. This 
is the credit he must have to trade on; that is the credit 
the banker does business on. This merchant or manufac- 
turer gives his note to the banker, say for $10,000.00 for 
three months. The morgan banker knows that Mr. M. is 
perfectly "good" for that amount, or he turns to his mer- 
cantile agency reports and ascertains that fact, with no 
more brain work than it takes to open a dictionary to ascer- 
tain the meaning of a word. 

The banker then takes up a printed discount table, on 
which he finds the amount of the discount all computed for 
him ready at hand, or he presses a button or two on a little 
machine and the machine tells him the exact amount of 
the discount, subtracts it from the face of the note and 
gives the remainder in plain figures. 

Assume that the morgan banker is moderate and shaves 
off only the amount given by a strict discount, leaving the 
proceeds of the note $9,850.00. The morgan banker does 
not hand over to Mr. M. $9,850.00 in cash. The morgan 
banker v/ould not want that. That would not be banking. 
The public believes, however, that the transaction amounts 



214 WHY THE CAPITALIST ? 

to that in substance. But it does not. What the morgan 
banker does is to write into the pass book of Mr. Merchant 
or Manufacturer credit of $9,850.00 and make out a sHp 
directing the book-keeper to write into the ledger a similar 
credit for Mr. M., and he calls Mr. M.'s attention to the 
rule of the bank that the account must not be drawn lower 
than $500.00. Mr. M. may think that he has received a 
loan. But be has not. He has now, it is true, something 
which is just as good as a loan, in fact better than a loan, 
because in a safer and more convenient form. Mr. Mer- 
chant or Manufacturer returns to his shop or factory and 
in the course of his business draws checks. By the time 
the three months are up, if the average is preserved, there 
will not have been actually paid out any more than $492.50 
by the bank, all told, on this so-called loan. Nor will even 
this small amount have been paid out at one time, or have 
remained out of the bank for any considerable time. For 
be it remembered that some of the checks given by Mr. M. 
are again deposited by the payee in the same bank. Of 
the proportion so appHed we have no direct or exact means 
of knowing. We have been told only about the clearing 
house swapping and that in these it takes less than five 
per cent to adjust balances in money. Be it also remembered 
that if any of this account is drawn out of the bank in 
actual cash for pay-rolls, it is but a very few days before 
it is back in the bank again. Be it also remembered that 
Mr. M. is in business and is receiving checks and deposit- 
ing them every day, and that the banker has the benefit of 
these checks also. 

In view of all the circumstances it is fair to assume that 
the facts furnished by the United States Comptroller of 
the Currency, showing that less than five per cent of the 
banking transactions that go through the swapping house 
have to be adjusted in money payments, give a fair es- 



THE EXPLOITATION OF THE EXPLOITER 215 

timate of that which is called real money, that which act- 
ually changes hands in banking transactions. 

We see from the foregoing that the morgan banker in 
the transaction gets $150.00 for a little simple book-keeping, 
plus the possible use of a small, unascertainable amount of 
cash, well within $492.50. If we assume that the actual 
expense to the banker for the operation of the system in 
this one transaction be $10.00, which is a fair estimate 
under present conditions and standards for an ordinary 
kind of routine work, then the remaining $140.00 represents 
interest that is paid for the use of less than $492.50 during 
a period of three months. If the whole of this $492.50 
were continuously out of the bank during the three months, 
it would make the rate of interest amount to 113.7 per 
cent per annum. But if we strike an average, we shall 
find that the mean amount of money coming into actual 
use does not exceed one-half of the amount stated. That 
would make the rate of interest 227.4 per cent. Nor does 
the modicum of money so put into actual use to make good 
the "line of credit" belong to the morgan banker, as we 
have already seen. It is the money of his customers de- 
posited with him. He pays a low rate of interest, four 
per cent and under for some of it. For much of it he pays 
nothing at all. It is simply the case again of the morgan 
baron of the feudal ages availing himself of the strength 
and substance of one set of serfs to fleece another set of 
serfs and vice versa, and upon occasion to beat down a 
rival. 

The foregoing considerations, of course, do not include 
any consideration of the bonuses, etc., that otherwise might 
be taken by the banker in other ways, of which there is 
no authentic or approximately accurate information avail- 
able. The extent of the banking business at the rates and 
under the conditions above set forth is enormous, and pre- 
sents to us in the large banker the apotheosis of the morgan. 



216 WHY THE CAPITALIST? 

Sturdy the statements of any typical American bank, which 
may be had on every band, given out to advertise the bank, 
statements that very few read closely and scarcely any can 
understand because they do not take the time to study the 
true nature of banking. Take this one: 

LIABILITIES. 

Capital $ 500,000.00 

Surplus 500,000.00 

Profits 68,380.24 

Deposits 7,788,784.87 

$8,857,165.11 

RESOURCES. 

Bank building $ 300,000.00 

U. S. and other bonds 1,363,65775 

Time loans 4,164,971.09 

Demand loans 1,574,580.16 

Cash on hand and in banks 1,453,956.00 

$8,857,165.11 
Here we start with What the bank calls capital of $500,- 
000.00. Of this there is $300,000.00 invested in the bank 
building. That is a permanent investment made because 
it is well understood that that money will not be needed 
for direct use in the banking business. It will not be loaned 
out. The banking house is made as showy as might be, 
for advertising purposes. 

Then we have the investment in United States and other 
bonds amounting to $1,363,675.75. This is also in the 
nature of a permanent investment, though not so much so 
as that of the building. We are not told how much is in 
other bonds. The former are very readily salable, and the 
latter we might assume are also such that can be sold in 
a fairly short time if need be. These represent an invest- 



THE EXPLOITATION OF THE EXPLOITER 317 

ment of money for which there is no immediate need and 
no probable need at any time in the banking business. The 
money is put into these as a readily liquidated investment 
so as to have it "earning something" and yet be available 
in fairly short order in case of a run or any other emer- 
gency. 

The next investment we see is in "time loans" so-called 
on commercial paper, the "discounts." This is THE bank- 
ing business, the big game, as it were. 95 per cent of this 
and over represents that portion of attributed values that 
is written from one account to another on the bank's books, 
from d'ebits to credits, and from credits to debits on the 
individual ledgers of the bank. The other five per cent, 
we still allow, is the amount that sometimes leaves the bank 
and then soon comes back again, settling the differences 
arising in the swapping of checks. Most of them are 
known as the transactions "through the clearing house." 

These time loans are included in the deposits set out in 
the bank's published statements, and, except there be a 
run on the bank, not more than five per cent of them leave 
the deposit accounts of one or another customer, or are 
made the basis of any demand for "cash." This, of course, 
remains true notwithstanding the writing back and forth 
from one account to another in the bank. 

Next we have the so-called "demand loans." These also 
are mere entries on the books of the bank to be transferred 
back and forth — that is, to the extent of about 95 per cent 
of them. They differ from the time loans in being termin- 
able, that is, payable on demand, and for that reason bring 
to the banker a little lower rate of toll called interest. These 
demand "loans" in actual practice run longer, however, 
than the time "loans" do. 

The bankers, naturally, would rather have their ma- 



218 WHY THE CAPITALIST? 

chinery running to its full capacity on time 'loans/' that 
is, on commercial paper of 30 or 60 or 90 days, because the 
rates are higher. But as the capacity of this banking ma- 
chinery is so enormous, the time "loan" business cannot 
fully occupy it without increasing very materially the dan- 
ger of a run on the bank and likewise increasing the danger 
of augmenting very much the disastrous results of a pos- 
sible run. So the banks take on a quantity of these demand 
"loans" and carry them on the books indefinitely. In case 
of a visitation of that one dread scourge, a "run," the de- 
mand 'borrowers" can be squeezed instanter. There is no 
waiting for their paper to mature. If the demand for pay- 
ment is not complied with at once by a payment in cash, 
or by a check on some other account that can be charged 
with the amount, the securities are thrown upon the market 
and realized upon forthwith. 

The proceeds of demand "loans" are also carried on the 
books of the banks as deposits, if not of the borrower then 
of the payees of the borrower, in the same manner as the 
proceeds of the time "loans" are. By deducting the sum of 
both "loans" from the remainder above given we shall find 
that the deposits in fact remaining are only $2,049,233.62. 
This then is the actual amount of the deposits. Add to that 
the $200,000.00 of the bank's capital not represented by the 
banking house and the $568,360.24 surplus profits not yet 
divided and we shall have $2,817,593.86. Of this sum there 
is invested in U. S. and other bonds the $1,363,657.75, leav- 
ing a balance of $1,453,956.11. How much of this there is 
in the bank we cannot tell because according to the state- 
ment part of it is in other banks. How much of it is serving 
the purpose of other banks in the same way does not appear. 
How much of it the depository bank has placed out on call 
loans we cannot tell. 



THE EXPLOITATION OF THE EXPLOITEI^ 219 

Here is a statement of another bank. This one separates 
the figures of the cash it has on hand from those of the 
cash deposited in other banks. 

RESOURCES. 

Banking house and lot $ 200,000.00 

Bonds 2,252,831.00 

Accrued interest 34,155-38 

Loans 8,561,987.84 

Overdrafts 472.52 

Cash in other banks 1,264,457.24 

Cash on hand 707,715.79 

$13,021,619.77 

LIABILITIES. 

Capital $ 1,000,000.00 

Surplus 1,000,000.00 

Profits 500,91 1.36 

Reserved for taxes 12,605.21 

Resources for interest 36,578.12 

Deposits 10,471,525.08 

$13,021,619.77 

Here the nominal deposits amount to $10,471,525.08. 
This includes the proceeds resulting from the discounting 
of commercial paper. These proceeds are entered as repre- 
senting deposits on the credit side of the accounts of the 
borrowing customers. They amount in the aggregate to 
$8,561,987.84. Deducting these sham deposits of money, 
we shall have as the actual deposits $1,909,537.24. Add to 
this the capital, surplus and unpaid profits of $2,500,911.36, 
and we shall have $4,410,448.60. When we deduct from 
this latter the sums invested in the banking house and in 
bonds and on deposit in other banks amounting to $3,717,- 
288.24, there will remain $693,160.36. This is $14,555.43 



220 WHY THE CAPITALIST ? 

less than the amount of cash in the statement because the 
statement sets out on the left as reserved for taxes and 
reserved for liabilities, together, $49,183.33. If then we 
deduct the amount of accrued interest on bonds, etc., ap- 
pearing on the right, namely, $34,155.38, and also the over- 
draft of $472.52, also appearing on the left, we shall have 
the $14,555.43 difference accounted for. The net result is 
that this bank has $693,160.36 of other people's money on 
hand over and above all other liabilities to meet possible 
demands for legal tender that could amount to $10,471,- 
525.08. In other words it holds in cash less than one fif- 
teenth of its demand liabilities and does not really own that. 
I have omitted from the calculation the further gain that 
accrues to the banker from the rule that forbids the "bor- 
rower" to draw his account below a certain percentage. 

On the strength of this arrangement a bank gets interest 
at discount rates on $8,561,987.84. If all this be at six per 
cent it means that this toll taken by the bank per year on a 
showing of $693,160.36 amount to $513,719.22. Interest 
computed on the amount actually held in the bank to meet 
demands on these discount credits at six per cent would be 
$41,589.62. If for our purpose we concede the taking of 
this latter amount of interest to be right, then we have the 
sum of $472,129.60 taken for the bookkeeping services per- 
formed by clerks. The bank does not pay any more than 
$20,000.00 a year for this work. If we further allow the 
bank a full 10 per cent on its building, we shall have a 
necessary expenditure under present conditions of say 
$40,000.00. For this the bank gets $472,129.60, an excess of 
$432,129.60, or 432 per cent. All of this profit rests on the 
blind belief instilled into the public that the banker is mak- 
ing business possible by lending money to the merchant 
and the manufacturer. Besides all this the investments in 
bonds and the money deposited with other banks, amount- 
ing to $3,517,288.24 are also drawing interest all the time. 



THE EXPLOITATION OF THE EXPLOITER 321 

We will analyze just one more bank's statement. Here is 

one taken from the report of the Superintendent of Banks 

of the State of New York for 1912. It sets out its 

Stated deposits at $4,507,923.00 

Deducting loans and discounts 3,181,803.00 

We have the actual deposits of $1,326,120.00 

Add to this the bank's capital 200,000.00 

And its surplus 271,988.00 

And we shall have $1,798,108.00 

Here are the investments: 

Real estate $ 1 1,600.00 

Stocks and bonds 134,934.00 

Public securities 301,697.00 

Other securities 42,500.00 

Deposited in other banks 1,047,127.00 

Other assets 5,250.00 

$1,543,108.00 

Leaving a balance of $ 255,000,00 

The published statement shows the amount of cash on 
hand including "cash items" as being $256,301.00 or $1,- 
301.00 more that the balance called for. This difference 
must be located in the item of "other assets $5,250.00" 
which cannot be analyzed. 

Here then we have a bank carrying deposit credits to 
customers to the amount of $4,507,923.00 for the full 
amount of which legal tender money can be demanded at 
any moment. Yet experience has demonstrated that it is 
not necessary to carry any more than $256,301.00 to take 
care of that obligation. Less than one seventeenth of the 
demandable obligations of the bank is kept in the banker's 
till. This is less than six per cent. All the remaining 



222 WHY THE CAPITALIST ? 

cash currency is "earning" a snug profit outside whilst 
within easy reach if at any time needed to head off that 
dreaded *'run." 

In other words, the bank is getting at least six per cent 
on $4,507,923.00 for keeping $256,301.00 in cash on hand. 
The computation gives us $270,475.38 "compensation," more 
than 104 per cent for this "service" alone. 

The foregoing illustrations are of New York State banks. 

The Comptroller of the Currency of the United States, 
in his report for 1912, tells us of 15,901 state banking in- 
stitutions. 

The stated deposits of these banks aggregate.$6747,o50,755.8i 
The "loans and discounts" are 5,390,349,187.21 

Leaving actual deposits $1,356,701,568.60 

Of this the cash on hand was 531,358,592.12 

Leaving to be accounted for $ 825,34^,976.48 

This $825,342,976.48 together with the "capital" not in- 
vested in real estate and furniture, and the surplus, etc., is 
all invested in interest paying securities. We see here that 
with an amount of cash on hand amounting to $531,358,- 
592.18 these state banks hold up against demand obligations 
assumed by them amounting in the aggregate to $5,921,- 
707,779.33. These figures show that the average amount 
of cash that the state commercial banks carry to meet their 
cash demand obligations is something less than nine per 
cent. From what we have seen this is a perfectly safe mar- 
gin under ordinary conditions. In fact, under ordinary 
conditions six per cent would be safe. Thus it appears that 
the average rate of interest on business "loans" drawn by 
the state banks of the country is between 11 and 12 times 
greater than is generally supposed. 



THE EXPLOITATION OF THE EXPLOITER 223 

As to the business of the national banks, the United 
States Comptroller gives us these figures in his report for 
1912: 

Deposits : 

Individual $5,891,670,007.00 

U. S. Postal .' 47,259,053.42 

U. S. Disbursing 11,968,274.98 

$5,950,897,33540 

Loans and discounts $6,040,841,270.81 

Overdrafts 20,168,074.45 

$6,061,009,345.26 
Deduct the outstanding na- 
tional bank notes, as 
these are loans, amount- 
ing to $ 713,823,118.00 

Balance of "loans" and discounts $5,347,186,227.26 

Excess of deposits over "loans" $ 603,711,108.14 

The report tells us that the amount of cash held on hand 
by the national banks on the same day, September 4th, 
1912, was $895,951,094.00. This means that these banks 
were on the day stated holding cash to the extent of about 
15 per cent of their demand liabilities. The national laws 
on banking are responsible for the fact that the national 
banks are carrying so much more cash to support their lia- 
bilities than the state banks generally find it necessary to 
carry. 

The development of the banking business has brought it 
about that the resulting disadvantage to the national banks 
is not offset any more by the right of the national banks 
to issue bank notes guaranteed by the government. The 
profits made by the issuing of these notes are very small 
compared to the profits derivable from interest on "loans" 
that to the extent of 95 per cent are not loans at all, but 
are simply book entries. Hence the recent legislation at 



^24 WHY THE CAPITALIST ? 

Washington changing the national banking law. It is 
usually spoken of as the "currency legislation" or the 
"money legislation" in the newspapers. The fault with 
those designations is that they put the accent in the wrong 
place. The principal and by far the most important object 
attained by that legislation will be the reorganization of 
the national banking system in such a way that the national 
banks will not be required under the law to carry so large 
an amount of cash as heretofore to hold up their book 
credits called 'loans" against the possibility of that dreaded 
"run." It would not have been wise to have insisted upon 
an abrogation of the existing legal requirement as to re- 
serves. That would have provoked a general public dis- 
cussion of the whole science of banking; and that would 
have thrown the fat into the fire. The principal objects 
that will be attained by the law recently enacted are two. 
One is the centralization of the national banks in such a 
way that each bank may maintain its individuality and 
prestige as a national bank, and at the same time have cer- 
tain centers or stations, to be called regional banks, where 
by the contribution of a relatively small amount of cash by 
each bank a sufficient supply of money in the aggregate 
may be maintained to relieve any individual bank by des- 
patching money to it on a rediscount of its paper whenever 
it is threatened with a run. This is called mobilizing assets. 
It will also enable the banks to extend the check exchanging 
or swapping system by the establishment of regional and 
national clearing houses. The features of this legislation 
that were talked of the most were entirely secondary and 
subsidiary. These secondary and subsidiary features were 
discussed most learnedly and in strange terms. They fur- 
nished the means to keep the public mind in a whirl on the 
whole subject of banking. Practically nobody outside of a 
few leaders understood the subject. 
The national banker could not operate his mill to its full 



THE EXPLOITATION OF THE EXPLOITER 225 

capacity, even when he could get the customers. It would 
have been too dangerous in case confidence had been shaken 
and all persons holding credits on the bank's books had de- 
manded that they be paid their demands in money. In 
other words, when large numbers called upon the banker 
to perform his contract to furnish money on demand to the 
full extent of their claims, things became shaky for the 
banker. He thrives like the bay tree when he is not called 
upon to perform his contract. When however he is much 
called upon to perform his contract, things are bad, every- 
thing is threatened with destruction. Panic ensues. 

The increase in the volume of this business of granting 
"loans and discounts" by crediting them on the banks' 
books to be written back and forth has been tremendous. 
It has exceeded in an astonishing degree the rate at which 
the stated wealth of the nation, or the business of the nation 
has increased. We are able to draw some interesting in- 
formation from the official figures on this subject. The 
Department of Commerce and Labor tells us that in 1870 
the entire wealth of the United States was $30,068,518,000, 
and that in 1904, the latest figures available at this writing, 
it was $107,104,211,917. That is, it was multipHed by a 
little more than three and one-half. During the same period 
the bank "loan" and discount business increased from 
$719,300,000 in 1870, to $7,982,000,000 in 1904. It was 
multiplied by 11. 

The figures available tell us that all the farm property in 
the United States, real and personal, in 1890 was worth 
$16,082,000,000 and that in 1910 it was worth $40,991,- 
000,000. It was multiplied by about two and a half. During 
that same period, the "loan" and discount business of the 
banks increased from $3,842,200,000 in 1890 to $12,521,- 
800,000 in 1910. It was multiplied by three and a quarter. 

The available figures show us that the manufactures in 
the United States increased from $11,406,927,000 in 1899 



226 WHY THE CAPITALIST ? 

to $20,672,052.00 in 1909, an increase of 8.1 per cent. Dur- 
ing the same period the "loan" and discount business of 
the banks increased from $5,177,600,000.00 to $11,373,200,- 
000.00, an increase of 119.6 per cent. 

The figures of the Interstate Commerce Commission tell 
us that the total operating revenues and income of all the 
railroads in the United States for the year 1894 amounted 
to $1,098,807,291.00 and in 1910 $2,829,109,462.00, an in- 
crease of 157.48 per cent. During the same period the 
"loan" and discount business of the banks increased from 
$4,085,000,000.00 to $12,521,800,000.00, or an increase of 
306.53 per cent. 

The figures furnished by the Geological Survey, De- 
partment of the Interior, tell us that the production of an- 
thracite coal in 1871 was 20,807,851 tons, and 75,433,246 
tons in 1911 an increase of 54,625,395 tons, or 262.5 per 
cent ; and the production of bituminous coal increased 
from 26,848,751 tons to 372,420,663 tons, an increase 
of 345,571,912 or 1286 per cent; that the production 
of pig iron increased from 2,188,526 tons in 1871 to 27,303,- 
567 tons in 1911, an increase of 25,115,041 or 1147.5 per 
cent. Yet during this same period of time the "loan" and 
discount business of the banker increased from $789,400,000 
to $13,046,400,000, or by $12,257,000,000. This is an in- 
crease of 1552.69 per cent. 



CHAPTER XX. 

THE MORGAN'S CRIMP REFORMS— CHARITY 
AND EFFICIENCY. 

The morgan does not like to have any fuss made about 
his game of "heads I win and tails you lose." It makes 
him nervous. That game is the law of his life and the 
order of his being. Therefore he is strong for law and 
order. It is his state, his law and his order that he is for 
and that must be maintained at all hazards. To him 
every effort to search into the inherent nature of his 
monstrous structure betrays the lawless mind. To dis- 
cuss the wickedness of morganism is to foment strife and 
disorder ! Prosecuting and persecuting these lawless 
minds and wicked fomenters, though most laudable, is not 
enough. Their influence must be counteracted. And 
their influence is most widespread. 

Every gentile outburst for self preservation, every turn 
of the worm, every noble impulse of the ignoble star- 
veling for some collective improvement, be it ever 
so pure, native and unsophisticated — to say nothing of 
that horror of all horrors, when the toothless worm tries 
to bite the iron heel — is at once ascribed to the hellish 
machinations of the lawless mind of the agitator and 
fomenter of strife. Of course, it is not expected or be- 
lieved by the morgan or his panders that a vestige of the 
natural spirit of self preservation remains or could re- 
main in the gentile after his long and careful training 
through the pulpit, the bench, the bar and the press. The 
constantly recurring expressions of resentment and pro- 
test, no matter how vague, unlearned, undefined or, albeit 
unsophisticated, or from unexpected quarters or upon the 

227 



238 WHY THE CAPITALIST? 

most inopportune occasions, furnish many painful sur- 
prises to the morgan, after all that he has done. He can 
not believe that there is so much ingratitude in the gentile 
heart. He actually believes that he gave and is giving the 
gentiles their only chance to live, that without him the 
gentiles could neither breathe air nor enjoy sunshine. 

To the morgan's mind the spirit of rebellion is not 
and should not be natural to the gentile's mind or heart. 
The morgan thinks it all attributable to the aforementioned 
lawless mind and fomenter of strife. To the morgan's 
mind, the lawless agitator and disturber plays upon the 
sufferings of the unfortunate, stirs up the passions of 
sympathy of the competent gentiles for the incompetent, 
creates an artificial fellow feeling in the hearts of the vir- 
tuous and strong for the "world's weak refuse. The in- 
herent feeling of resentment against constant oppression 
and exploitation that bursts forth here and there and 
everywhere, and that, like Banquo's ghost, will not down, 
does not, cannot exist for the morgan's mind. To him, 
all of this is the work, the consciously planned work, the 
subtle work of the agitator. What a wonderful, what a 
marvelous mind and spirit this agitator must have! The 
old Satan no longer prowls about the earth seeking souls 
to drag to hell. The modern factory system has chained 
him more effectually than he was ever chained before. 

To the mind of the morgan, that growing spirit of 
unrest, that saving inherent excellence of human nature, 
is a new Satan. This inherent excellence, the morgan 
and his panders also personify, as they personified their 
deity and their devils. They paint it black as pitch and 
call it the agitator with the lawless mind and disorderly 
career. The morgan, who used to be most concerned 
about saving the souls of the gentiles from the wiles of 
that Satan who smells of sulphur and brimstone and fire, 
has now a growing concern in the new danger, that 



THE morgan's crimp REFORMS 229 

modern Satan who consumes midnight oil and smells 
of books. So the morgan dons the mufti of reform. His 
immense pile of ill-gotten wealth is pointed to by his 
dupes and panders, as proof positive, both of his good 
faith and his high comprehension. With great parade of 
learning, two bracers are presented by him. The one is 
charity and the other efficiency. The one is a little salve 
rubbed upon the open sore which it cannot heal, and the 
other is a hope-inspiring promise that things will be better 
by and by. The salve of charity makes the recipient more 
abject and broken in spirit than before. It makes him 
confess and even realize an inferiority that does not exist. 
It makes him accept with resignation and even thankful- 
ness the monstrous conditions that are purely the result 
of false and artificial teachings. Like bad advice, it 
makes the innocent and worthy confess the commission 
of crimes that they never committed. It smears virtue 
and nobleness of character with the pitch of indolence, 
incontinence and criminal propensity, and invests greed 
and ravenous cupidity with the ascension robe of an arch- 
angel. I cannot hope to set forth all of the ways in which 
charity further enslaves the gentile, mind and body. I 
shall have to leave it to some Carlyle to draw the indict- 
ment of this much lauded bawd called charity. 

Charity affords to the morgan a most valuable additional 
support in his overlordship. His so-called charitable 
donations are only cheap premiums paid by him for in- 
surance. In that circle where gamblers' ethics hold sway, 
the gambler is considered a very decent fellow who tosses 
back to his victim enough to buy a drink and pay his car 
fare home, after stripping him of his week's wages. So 
the morgan gets the reputation for philanthropy by giving 
back in about the same way what amounts to a sneering 
trifle from the pile of plunder that he has heaped up by 
his depredations. His philanthropic parade is to him a 



^30 WHY THE CAPITALIST ? 

necessary and legitimate expense of the business. It is 
cheaper than maintaining armies. All told, it amounts to 
a shrewd and safe investment. Not only the organizations 
through which the morgan's charity is placed, but also 
the principle of his charity itself, is based upon and can- 
not be maintained without the poverty that results from 
the expropriation and exploitation of the gentile by the 
morgan. The morgan makes paupers so as to parade 
as philanthropist. His iso-called philanthropy then en- 
trenches him so that he can go on exploiting mankind the 
more, and produce more pauperism. 

As to the efficiency schemes, these are, if possible, even 
worse than the charities. There can be no valid objection 
to a higher degree of effixiency in itself. On the contrary, 
it is in and of itself quite desirable, and would be welcome 
if the worker obtained the additional value that he pro- 
duces because of his higher efficiency. But such is not 
and cannot be the case under the morgan's regime. The 
measure of the worker's allowance is the amount neces- 
sary for him to live upon in his station of life and to 
reproduce his kind. It always seeks, as it were, that level. 
As the worker's ability advances to manage with less, he 
gets less, and the morgan gets constantly the more. This 
applies to all gentiles. Every saving and every economy 
learned and applied by the gentile, inures sooner or later 
.to the greater substantial aggrandizement of the morgan, 
by simply causing to grow larger the amount of surplus 
that flows to the morgan's coffers. In fact, as we have 
seen, the worker is compelled from time to time to wage 
destructive and costly warfare against being forced below 
the line before he has learned to manage on the still more 
greatly reduced allowance that the morgan is relentlessly 
trying to force him down to. In other words, the gentile 
is never learning to save and economize fast enough to 



THE morgan's crimp REFORMS 231 

suit the morgan. Hence the frequent recurrence of in- 
dustrial warfare. 

There is nothing more astonishing than the persistency 
with which the morgan pretends to hang on to the ancient 
and exploded notion and theory that without changing 
our economic system, an increase of the worker's output 
will in itself improve the economic condition of the gentile 
masses. One would almost think that the morgan is wil- 
ful in his dogged blindness and deafness as to this theory 
of his. But the morgan in his true nature is a beast 
of prey. He is a gamester. There is no one so stupid as 
a cheat when taken outside of his game or when facing 
opposition to his game. The cheat must always have 
the easily subjected and unsophisticated mind to deal with, 
the mind that is always prone to fall in on the other fellow's 
game. 

The questioning, doubting and suspicious mind is 
not prone to fall in on the other fellow's game, and always 
portends disaster to the cheat. The cheat is always non- 
plussed when his game is exposed. He always fights in 
avoidance of the attack, he never meets it. He will flash 
his showy jewelry and his dim witticisms and make great 
parade of his respectability, or if needs be, fume with in- 
dignation at the "slanderous insinuation and aspersion 
cast upon an honest man." Having driven off the enemy 
either with horse laughter or with brickbats, the morgan 
proceeds to do business with those who wish to do busi- 
ness. He shows them how they can gain great things by 
playing his game, by accepting his imposed conditions. 

These conditions he admits seem most exacting, but 
progress is the order of the day, he says, and the survival 
of the fittest— under these conditions imposed by him — is 
the law of nature. Order and law is his forte. Those 
that are "too weak" to meet these conditions are the unfit 
that must succumb, they are the unfortunate, the poor that 



232 WHY THE CAPITALIST ? 

are always with us! These poor subsist a little while on 
charity, or in prison, and then pass out unwept, unhonored 
and unsung. That's the way nature has of sloughing off 
the undesired. The morgan and his panders prate most 
sagely of human nature, and of nature's laws as the mor- 
gan has them interpreted, and of human law and order as 
his wealth and power has dictated them. 

The morgan and those in the service of his holy cause 
point to the glittering cheap prizes drawn in the prize- 
packages dearly bought from him with back-breaking 
labor. Of those who went away empty handed or with 
the ordinary prize-package brass button, and of the crushed 
and broken ones, thrown out upon the scrap heap of hu- 
manity, a discreet silence is maintained. 

To supply the ever growing demand of the morgan in 
the business of raising false hopes that things will be 
better by and by, there has grown up within recent times 
a useful new profession of efficiency engineering. Organ- 
ization and management for efficiency has been made a 
special science. It is already adding immensely to the out- 
put of human effort in the industries, and its possibilities 
are beyond conjecture. Votaries of this new science lay 
themselves open however to adverse criticism by pre- 
tending that their science furnishes a solution of the social 
question. They fall into the error that previous inventors 
and students fell into, of supposing that increased pro- 
ductive capacity spells an increased distribution of result- 
ing benefits. History proves that no greater fallacy was 
ever evolved. When these scientists stick to their special 
line, and things pertaining to it, they do well enough. But 
whenever they enter the domain of the political econom- 
ist and sociologist they become hopelessly lost. They are 
likely to think that because they have a masterly grasp 
of one science, they necessarily, without further equipment, 
must be capable to settle off-hand all other questions in 



THE morgan's crimp REFORMS 233 

all other departments of learning. So they rush in every- 
where and thrash aimlessly about. They, like other work- 
ers, sell their labor power to the morgan. If they would 
only let it go at that; if they would only not feel called 
upon to break a lance in defense of the morgan's monstrous 
institution of private property, they would not render them- 
selves proper subjects of the contempt and ridicule of 
students. 

Mr. Frederick Winslow Taylor has had great success 
as an efficiency expert. He has perhaps been the one most 
conspicuously before the general public as a teacher and 
lecturer. Of late he has been somewhat of a lecturer be- 
fore morgan-minded clubs and congregations on his meth- 
ods of solving the social problem by means of higher 
productive efficiency. He has also written a book called 
"The Principles of Scientific Management." The opening 
sentence of the first chapter is: "The principal object of 
management should be to secure the maximum prosperity 
for the employer, coupled with the maximum prosperity 
for each employe." Mr. Taylor proposes to attain this end 
by training and developing each individual worker so that 
he can (at his fastest pace and with the maximum of effi- 
ciency) do the highest class of work for which his abilities 
fit him, and "to induce him to use his best efforts, his 
hardest work, all his traditional knowledge, his skill, his 
ingenuity, and his good will to yield the largest possible 
return to his employer." Mr. Taylor gives many instances 
in which this object was most successfully attained under 
his direction and management. I mean attained for the 
morgan. He tells how 75 men under him were receiving 
$1.15 a day each for handling 12% long tons of pig iron. 
Then he instituted his reform. He started by picking out 
a most ox-like Pennsylvania Dutchman. This piece of 
stunted mentality was flattered with special attention, called 
a high-priced man that should not be working for a meagre 



234 , WHY THE CAPITALIST ? 

$1.15 per day, and so gotten to do task-work under a man 
with a stop watch. He picked up a pig of iron when told 
to, walked when told to, dropped the iron when told to, 
returned to the pile when told to, "rested" when told to ; 
and so worked the day through, loading 47 long tons of 
pig iron from the ground into railroad cars. At $1.15 
for I2V2 tons, the loading of 47 tons would cost $4.32 a 
load. Under Mr. Taylor's method of higher efficiency it 
cost only $1.85, an additional profit of $2.47 for the morgan, 
as compared to the 70 cents more that the pig-iron handler 
got. One thing naturally follows from the introduction 
of this great reform of Mr. Taylor's, and that is that a 
given amount of pig iron could be handled by one-fourth 
the number of men formerly required. This rendered so 
much keener the competition among pig-iron men for a 
living, and the men less fit to fill the new requirements 
would naturally be "weeded out." The scientific reformer 
says on page 61 of his book that only one out of every 
eight of his 75 original pig-iron handlers were capable of 
handling 47% tons of pig iron per day. The man that 
could work the whole day under a driver with watch in 
hand, this reformer himself says in this book bad to be, 
and invariably was, as stupid as an ox. Mr. Taylor might 
have added that such men were kept as stupid as oxen 
by their work. 

The next great instance of solving the social question 
that Mr. Taylor gives, relates to shoveling, and is the 
laborious result of thousands of stop-watch observations. 
Under the system evolved by Mr. Taylor, the number of 
laborers employed by one institution was reduced from 
about 600 to about 140. The average number of tons of 
material handled by each man per day was raised from 
16 to 59. The average daily pay of each man that survived 
on the job was raised from $1.15 to $1.88. The average 
cost of handling a ton of 2240 pounds was reduced from 



THE morgan's crimp REFORMS 235 

72 cents to 33 cents. In other words, a man formerly got 
$1.15 for moving 16 tons. Now he gets $1.88 for moving 
59 tons. Under the old system the handling of 59 tons 
cost $4.28. Had the wages remained the same, the new 
additional profit would have been $3.13. But the laborer 
had to be given something more to keep him going at the 
higher pace and place in society to which he was lifted 
for the time being. Seventy-three cents is the measure 
of his lift. That is less than one-fourth of the additional 
value that his labor now produces. The morgan gets a 
raise of $2.40 per day on each laborer, or more than three- 
fourths of the new gain. The increase of the surplus 
profit flowing to the morgan by reason of this one reform 
for the year amounted at one plant to $36,417„69. But Mr. 
Taylor seemingly does not consider the sufferings and pri- 
vations of the 460 men that were weeded out by the 
process, or of their wives and children. 

Mr. Taylor devotes many pages of his book to the in- 
genious manner in which the efficiency of children inspect- 
ing steel bearing-balls was so increased that thirty-five 
girls did the work formerly done by 120, and raised the 
accuracy of the work 66 per cent. The value produced 
by these girls was thus increased 343 per cent. Of this 
they got about one-fourth. Their pay was raised from 80 
to 100 per cent. The rest of the increase went to the mor- 
gan's coffers. 

Again, Mr. Taylof tells how he went into a factory and 
by the use of stop-watch, slide rules, close scientific ob- 
servations, careful computation, co-ordination, changing 
of tools and the material of which tools are made, suc- 
ceeded in speeding up the machines. The minimum accel- 
eration was two and a half times the former speed. The 
maximum acceleration was as much as nine times. He 
says that within three years the output in this factory had 
in this way been more than doubled per machine and per 



236 WHT THE CAPITALIST ? 

man, and that on an average the wages of the men was 
increased about 35 per cent, whilst the sum total of the 
wages for a given amount of work was lower. Now the 
effect of this was to increase greatly the amount of value 
produced within the same length of time by each man. 
Mr. Taylor does not say how much this increase was, but 
says it was more than 100 per cent. That is quite evident 
when we are told that the speeding up was from two and 
a half to nine times the former speed. Mr. Taylor should 
have been more definite in this, since he is posing as a 
political economist and sociologist as well as a scientific 
organizer. He tries, however, to be precise in telling us 
that the average increase in the earnings of the workmen 
was about 35 per cent. Now that is about one-third of 
the increase in value that the worker gives to the morgan 
at the very minimum of that increase, as we are informed 
by Mr. Taylor. In other words, for every thirty-five cents 
increase that the worker gets in his pay envelope, he gives 
the morgan an increase of more than a dollar. How much 
more, we are not told and therefore are left to infer for 
ourselves. Of course it is true that the efficiency engi- 
neer contributes to the resulting increase in output. We 
are not told how much the efficiency engineer gets of the 
value that he so produces, but it is safe to say that it is 
a very small proportion. 

Mr. Taylor's excellent work is that of substituting scien- 
tific method and management in the place of rule-o'-thumb 
lack of method, and mismanagement. His work belongs 
in the same classification as that of an inventor or im- 
prover of a machine. Mr. Taylor could have stayed where 
he belongs and been content to enjoy his laurels. But no, 
he must go forth and seek new worlds to conquer. He 
enters the world of political economy. For that world 
he is as unsuited as would be his stolid, ox-like pig-iron 



THE morgan's crimp REFORMS 237 

handler. Worse than that even, Mr. Taylor has been ren- 
dered even more unfit by his previous activities and ex- 
periences. He seems not to know that he is trying to 
cajole students with the same sort of chaff that produced 
such good results with his ox-like Pennsylvania Dutchman 
at the pile of pig iron. So Mr. Taylor goes right up to 
the question of "a fair division between the employer and 
the workman/' and he cites the case of the pig-iron han- 
dler, and admits that it does not look fair. Here he is 
in deep water before he knows it. All in a sputter, he 
delivers himself of the most ordinary impossibilities of 
the shallow-pated and superficial newspaper writer, who 
for a pittance a week tries to hold the moon with his teeth. 
He tells us that this appearance of unfairness is an illu- 
sion merely; that it is not unfair at all; that the morgan 
does not get it, but that the consuming public gets the 
benefit. He gives us no intimation of what he means by 
"the consuming public" as distinguished from the mass; 
of workers and their employers. He does not seem to 
know that a great part of the consuming public consists 
of wage workers in some form or another; nor ever to 
have been informed that the purchasing power of the 
individual worker has for a long time been steadily de- 
clining; or that pensioners and persons living on fixed 
incomes have for a long time been finding it constantly 
and Increasingly more difficult to live on their allowances. 
He does not seem ever to have understood that the con- 
stantly increasing cost of living denies the claim that the 
consuming public gets the benefit of the improvements in 
production that result from science. 

Mr. Taylor seems to be Innocent of all understanding 
of the position In society of the gentile class in its three 
orders, or of their expropriation and Its results. His 
"consuming public" is the morgan class. 

Mr. Taylor as a scientist is only one of a type of minds 



238 WHY THE CAPITALIST ? 

that seem to think that because they must take their work- 
ing ability to the one market we now have, namely, the 
market of the morgan, therefore they owe allegiance to 
the morgan in all things ; belong body and soul to the mor- 
gan, and must at all times and upon all occasions defend 
and support the morgan's scheme of exploitation and must 
even go outside of their work and beyond their depth 
and understanding to win favor. But the morgan himself 
does not know any better. The kind of learned misfit odds 
and ends so served up serves his purpose. So 'twill do 
most excellently. 

I have before me a booklet of instruction for managers 
of stores and of departments in department stores. It is 
used extensively as a guide and sets forth in the most 
native and unaffected simplicity the morgan's profit-taking 
point of view and economic analysis. It is in fact a splen- 
did presentation of the profit-taking propensity. It makes 
a special plea to managers to bring about the largest return 
of profits possible. It points out that the salesmen and 
saleswomen must sell, at prices 50 per cent above cost, 
not less than twenty times as much as their respective 
wages amount to in order to "earn" their wages. This 
must be the average the whole year round. The bases 
for the gradations of wages are set forth at length. The 
clerk that gets $4.00 a week must sell at least $80.00 
worth of goods a week; when he gets $5.00 he must sell 
at least $100.00 worth ; when he gets $6.00 he must sell 
at least $120.00 worth a week; when he gets $7.50 he 
must sell at least $150.00 worth a week; when he gets 
$10.00 he must sell at least $200.00 worth ; when he gets 
$12.50 he must sell at least $250.00 worth; and when he 
gets $15.00 a week, he or she must sell at least $300.00 
worth of goods each week. 

At the lowest compensation stated, the beginner sells 
$80.00 worth of goods a week. The 50 per cent advance 



THE morgan's crimp REFORMS 239 

on cost gives $26.66 gross profits. The wages are $4.00, 
the other expenses of doing business are computed to be 
$9.33. This leaves a net profit of $13.33. Here we see 
that the clerk's efforts brought in a gain, over and above 
the other expenses of doing business, amounting to $17.33. 
Of this the clerk gets something less than one-fourth. 
One-fourth would amount to $4.33, but the morgan keeps 
the 33 cents, to encourage the clerk to do better. 

The next week this clerk sells $100.00 worth and gets 
his $1.00 raise of salary, we will say. The gross profits 
now amount to $33.33. Deducting the expenses of doing 
business, except as to this clerk's pay, $9.33, we have 
$24.00 left for the clerk and the morgan. This is $6.67 
more than the measure of their prosperity for the week 
before amounted to. Of this $24.00 the clerk gets $5.00, 
which is one-fifth, and 20 cents besides, generously thrown 
in by the morgan as an expression of his appreciation. 
The clerk's raise of $1.00 is less than one-sixth of the raise 
that the clerk's increased efficiency gave to the gracious 
morgan. Hence the appreciation. The morgan gets the 
other $5.67. 

Here we see the rate of progress achieved as a reward 
of faithful services. The young woman who enters upon 
such employment does not as a rule expect to make that 
her life work. She accepts the position in the hope that 
it will not be necessary to pursue that kind of work for 
any considerable length of time. She hopes to escape by 
getting married. 

But with the young man it is different. Marriage does 
not offer to him an avenue of escape, except in rare cases. 
Nor does he see any other way to escape. So he begins 
a wearisome climb in the hope of becoming a high-class 
salesman on the pay roll of the department store syndicate 
at $15.00 a week. He diligently acquires all of the sneak- 
ing arts of the underling tradesman. Manhood is de- 



240 WHY THE CAPITALIST ? 

based, character broken, and servility is stamped upon 
every one of his features. Many a v^eek his record of 
sales falls just a little belov;^ the figures that v^ould bring 
to him the coveted raise. When he succeeds, the increase 
at best amounts only to one-fifth of the increase in profits 
that his higher degree of efficiency has produced. Some- 
times his portion is only one-seventh of that enhancement 
of profits that he has brought about. 

Despite the flood of books and swarm of experts we 
have not all the facts. It is not the desire of the morgan 
that we have all the facts, and the influence of his interests 
has the facts held back from us as much as possible. But 
from the information that we have, it is easy to under- 
stand how it is and why it is that the morgan is growing 
huger all the time. 



CHAPTER XXI. 

THE CLAIM THAT CONDITIONS ARE IM- 
PROVING. 

Whenever the morgan as preceptor, and has panders, 
are hard pressed for argument they invariably assert that 
they have been doing a great deal for "our workingmen," 
studying their problems; and they urge that they cannot 
accomplish everything at once as an excuse for conditions 
as they are. They claim credit for giving the worker 
a great deal more than he used to get. They claim that 
they are raising wages all the time; that they are con- 
stantly doing things to improve the worker's condition, his 
health, his comfort, his education, and to increase his hap- 
piness. Then with swelling chest they point to what the 
worker has today that his great-grandfather did not have. 

The fact is that the morgan has not moderated or given 
up a particle to the worker or to any order of the gentile 
class whatever. On the contrary, he has been growing 
more resourceful in his perverseness. 

If sore eyes are not as prevalent now as they were a 
few generations ago;j ii faces pitted with small-pox are 
less frequent ; if yellow fever and chblera have come to be 
less of a scourge and dread to the worker and to man- 
kind; if scarlet fever, diphtheria and other diseases of 
childhood carry off a somewhat smaller percentage of the 
worker's children ; if there is a little less of malaria with 
its accompanying ills, no thanks are due to the morgan. 
It is not because of him, but in spite of him. It is because 
the workers in the sciences of medicine, hygiene and san- 
itation have been untiring in their fields of labor to improve 
and lift the health of the human race; it is because the 

241 



242 WHY THE CAPITALIST ? 

line of workers in the building trades, from the architects 
to the plumbers, have been indefatigable in their labors 
to render the dwelling places less vile and unhealthy; 
it is because the workers engaged in what is called public 
works, from the civil engineer to the digger in the ditch, 
have all been doing as much as they were permitted to do 
under the morgan regime to bring about more healthful 
conditions. If the worker's teeth do not decay quite so 
fast as they used to and thereby affect his health also, it 
is not because of anything the morgan has done or caused 
to be done. It is simply because workers have studied 
and to that extent developed the science of dentistry for 
the benefit of the human race. If the food that the worker 
gets contains a little less of the morgan's adulterants for 
profit, or is a little less diseased, or a little less putrid, 
it is not at all because the morgan has turned saint. It 
is wholly because the workers in food chemistry have been 
so unremitting in the work of exposing the boldness, bald- 
ness and eventual unprofitableness of these frauds and 
their damaging effect upon the general health and working 
ability of the worker that even the morgan's state has 
been constrained to concede some little relief for the sake 
of health and profit-producing work, so that the supply 
of efficient workers might not be seriously impaired. If 
the houses of the workers seem any less miserable than 
they used to be it is not owing to any consideration in 
that respect by the morgan. It is because the worker's 
greater ability and better methods in preparing material 
and erecting houses makes better houses more profitable 
as permanent investments to draw from the worker, in the 
form of interest or rent, more of that part of his allow- 
ance which he formerly needed in larger volume in other 
ways. In other words, just as sure as one drain on the 
worker's wages is diminished the morgan's system opens 
up and multiplies other drains. 



THE CLAIM THAT CONDITIONS ARE IMPROVING 243 

The manufacture of household utilities, designed, in- 
vented and made by the worker has been a source of great 
profit to the morgan under his system of manufacturing 
and selling for profit. But no material benefit therefrom 
has accrued to the worker as a worker. He is not receiv- 
ing one jot more of the value that he produces. But quite 
to the contrary, he is receiving less and less of it all the 
time. All of the things that the worker has now that his 
ancestors did not enjoy have been and are produced by 
the worker and come to him because they contain less 
value in spite of their greater utility. They are cheaper 
and yield much larger profits to the morgan. The cook 
stove affords a much cheaper method of cooking food 
than the old style hearth, and the better the cook stove 
the greater the saving that results from its use. The 
sewing machine in the home is a great source of revenue 
to the morgan, parading as manufacturer and seller, as 
well as a great utilizer and economizer of the worker's 
domestic resources. It also furnishes the morgan with 
much greater profits in his ready made clothes factories 
and shops. If the worker should get what seems to the 
morgan more cotton goods than his ancestors got of coarse 
linen and hempen, it is because cotton is cheaper and the 
more of it that is used within the morgan's restrictions, 
the more profits the morgan gets. The worker invented, 
made and perfected all of the machinery and mills, and 
he raises the cotton and makes the cloth so much cheaper 
and in such larger quantities that the morgan could not 
use it all, or even destroy it by his own efforts, so he reaps 
a greater profit from it because it is cheap and the worker 
needs it for use. 

If the worker today may eat wheaten bread instead of 
the bitter acorns that constituted the staff of life of his 
ancestors in Europe he need not thank the morgan for the 
change. Before the workers had developed agriculture 



244 WHY THE CAPITALIST ? 

the titled morgan's lands were covered with extensive 
forests, consisting in great part of oak trees. The morgan, 
then as now, took all the tid-bits for himself and favorites, 
and made the workers live on mast — that is, the bitter 
acorns and beechnuts — and strange as it may seem, our 
forefathers developed quite a fondness for that diet. Of 
course, the morgan told them that that was the most 
wholesome of foods for them. The morgan was rich, 
and what he said must be true, they thought. So our 
simple-minded ancestors crossed themselves, blessed the 
morgan and were profoundly grateful to him for acorns 
to eat laden with tannin. As agriculture advanced and the 
forests gave way to fields cultivated by the worker, with 
the kind permission of the morgan, rye, oats and wheat 
became a cheaper article of diet and more plentiful than 
tannin-laden acorns and beechnuts. Yet the panders of 
the morgan want us to feel humbly thankful to their 
patron and master for graciously bringing about the change 
of diet. 

We read that during the time of Charlemagne such 
things as lettuce, cress, endive, carrots, beets, turnips, 
onions, were only to be found in the emperor's kitchen- 
garden, to be eaten by the morgans of noble blood ; that 
Catherine, one of the wives of Henry VIII, could not 
procure a salad for her dinner, as no potherbs were grown 
in England, and a gardener was brought over from Hol- 
land to start a kitchen-garden. Was it the gardener or 
was it the kind morgan in the guise of king that did the 
work? We also read that peas were unknown before 
1550 when a French gardener developed and introduced 
them. It is not so long since our ancestors would not eat 
tomatoes, because these were believed to be poisonous, and 
it is more recently still that we have seen green peppers 
grow into favor in America as an article of diet. 

How absurd and brazen for the morgan to claim credit 



THE CLAIM THAT CONDITIONS ARE IMPROVING 245 

for the greater variety and wholesomeness of foodstuffs 
developed by the growing intelligence of the worker him- 
self! We read that in colonial times the negro slaves in 
tidewater Virginia and Maryland were surfeited with dia- 
mond-back terrapin, and that in all the colonies shad 
in season was the principal diet of the negroes and the 
poor whites. Why? Because diamond-back terrapin and 
shad were so plentiful that they were the cheapest things 
the workers could be fed upon, and because these foods 
were so cheap that they did not appeal to the discrim- 
inating palate of the morgan. 

Our common, ordinary working ancestors used to wear 
the skins of wild animals. Why? Because they were the 
cheapest article of clothing then procurable. When by 
reason of the inventive genius and acquired skill of the 
workers, woven fabrics afforded a much cheaper article 
of clothing, the worker got woven fabrics. The better 
qualities of furs are now scarce and are provided only for the 
morgan. 

If the workday has in some few lines of industry be- 
come a little shorter it is not because the morgan contents 
himself with less surplus value. He does not. He in- 
variably speeds up the machine to make up for the short- 
ening of the day and thereby makes the work of produc- 
tion more intensive. If the worker can have an occasional 
trolley ride he is not in the least beholden to the morgan 
for it. The whole of the electrical equipment, cars and 
road, are the product of the worker's brain and brawn; 
and in order to have the price for these rides the worker 
must forego other things, and because of these additional 
facilities that the worker now has to go to and from his 
work, the morgan, besides getting the benefit of more of 
the worker's power gets larger profits from the worker 
for the use of lands and lodgings located farther from 
the factory. 



24:6 WHY THE CAPITALIST ? 

If the worker may go to a moving picture show it is 
not because of the morgan's goodness of heart, or at his 
expense, either directly or indirectly. The worker has 
produced and developed the moving picture and can have 
a little diversion by means of it, only because it is much 
cheaper than the saloon or many other means that the 
worker was formerly compelled to resort to for a little 
much-needed relaxation. If the worker can have a news- 
paper it is because the worker has himself made the news- 
paper one of the cheap means of entertainment and to 
some extent a substitute for other and more expensive 
entertainments, and it is also to some extent because the 
morgan has himself helped to make the newspaper cheap 
to help his own profit-getting schemes by making it an 
advertising medium for his swindling bargain-counter en- 
terprises. 

The foregoing, it is true, are only generalities. The 
learned panders of the morgans will deny to us the right 
to indulge in generalities. They claim that right for them- 
selves as their exclusive and special privilege and prerog- 
ative. 

So let us now try to be as definite and specific as avail- 
able data will permit. It is to be regretted that that data 
is not available in such abundance as it might well be. 
But that is not the fault of the worker. It is because the 
morgan's interests as expressed and enforced by and through 
his state has willed it otherwise. The morgan's interests 
dictate the laws and the policies of the government. But 
still there is sufficient to answer in a way our requirements. 

The United States Census of 1890 showed that the 
average worker in the manufacturing industries of this 
country was receiving $442.82. The Census of 1900 tells 
us that these worker's wages went down to $437.48, or 
1.6 per cent in the ten years. It will be remembered that 
we had a severe business depression which started in 1892. 



THE CLAIM THAT CONDITIONS ARE IMPROVING 247 

Wages had dropped considerably lower than the figures 
given and were beginning to return to their former basis 
again when the census taker came along and found the 
wages back to within 1.6 per cent of what they were ten 
years before. 

But these figures would be of very little service to us 
if we could not know what the worker's wages would buy 
for him. The United States Bureau of Labor Statistics 
in its Bulletin No. 113, gives us the relative prices of 15 
articles of food, year by year, from 1890 to 1912. There 
was some fluctuation during the hard times that began 
in 1892. But by the time of the Census of 1900 retail 
prices had become firm again and had resumed their up- 
ward trend. Comparing the end of this ten-year period 
with the beginning we find that the retail price of sirloin 
steak advanced 5.1 per cent, round steak, 9.6 per cent; 
rib roast, 7.5 per cent; pork chops, 7 per cent; smoked 
bacon, 6.6 per cent; smoked ham, 2.2 per cent; hens, .5 
of one per cent; lard declined 1.4 per cent; flour declined 
14 per cent; corn meal declined 8 per cent; eggs declined 
1 per cent; butter declined 1.6 per cent; potatoes declined 
9.3 per cent; sugar declined 17.6 per cent, and milk de- 
clined 1.6 per cent. 

For the remainder of the period covered by these re- 
ports the rise in the prices of the 15 articles of food has 
very few hesitations, and these are slight and of too short 
a duration to have any effect. The figures showing the 
wages of the worker also show a continuous rise, but by 
no means in keeping with the rise in the price of food 
stuffs. Wages are always falling farther and farther 
behind. It is clearly shown that as the worker advances 
in intelligence and ability to do more with the allowance 
of wages that he gets, those wages are reduced by the 
depression of their purchasing power. What . possible dif- 



248 WHY THE CAPITALIST ? 

ference in length can it make if the yard stick is short- 
ened at one end or at the other? 

The statistical abstract number 34, issued by the Depart- 
ment of Commerce and Labor, imparts the information 
that these wage workers in the year 1905 were receiving 
on an average $477.39, or an advance of 9 per cent over 
what they got five years before. Bulletin 113 shows that 
during these five years the 15 articles of food were ad- 
vanced in their retail prices at rates of from 6.3 to 34 
per cent. Sirloin steak advanced 6.3 per cent, round steak 
12.9 per cent, rib roast 10 per cent, pork chops 19 per cent, 
smoked bacon 34 per cent, smoked ham 18.8 per cent, lard 
19.7 per cent, hens 16.6 per cent, flour 24.7 per cent, corn 
meal 32 per cent, eggs 29 per cent, butter 10.6 per cent, 
potatoes 21 per cent, sugar .9 of one per cent, milk 8.7 
per cent. 

During the next period of five years, namely, down to 
1910, the wages of these workers advanced to an average 
of $518.05 per year, or another 8.5 per cent. The advance 
made in the prices of foodstuffs this time were of amounts 
from 13.7 to 29.4 per cent. Sirloin steak advanced 13.7 
per cent, round steak 16.4 per cent, rib roast 13 per cent, 
pork chops 28.9 per cent, smoked bacon, 27.4 per cent, 
smoked ham 19 per cent, lard 29.4 per cent, hens 20.8 
per cent, flour 16.7 per cent, com meal 17.6 per cent, eggs 
18 per cent, butter 25 per cent, potatoes 12 per cent, milk 
17.5 per cent, granulated sugar declined .4 of one per 
cent in price. 

Figures are not available to show the wages received 
by these workers subsequent to the Census of 1910, and 
therefore cannot be brought into comparison with the 
prices of foodstuffs given in Bulletin 113 for the remainder 
of the time down to 1912 inclusive. 

In the twenty years, average wages advanced in the 
manufacturing industries from $444.82 per year to $518.06, 



THE CLAIM THAT CONDITIONS ARE IMPROVING 249 

an increase of $73.24, equal to 16.5 per cent. During the 
same period the rise in the retail prices of foodstuffs was 
as follows: Sirloin steak 27 per cent, round steak 43 per 
cent, rib roast 33.5 per cent, pork chops 56 per cent, smoked 
bacon 82.8 per cent, smoked ham 44.5 per cent, lard 52.8 
per cent, hens 41.7 per cent, flour 25.3 per cent, corn meal 
43.8 per cent, eggs 54 per cent, butter 35.9 per cent, pota- 
toes 22.4 per cent, milk 25.7 per cent, whilst sugar de- 
clined 20.8 per cent. 

In 1900 the salaried employes in the manufacturing in- 
dustries were getting on an average of $1045,72 per year. 
In 1910 they got $1186.16. This was an increase of 13.43 
per cent for the ten years, as compared with 40 per cent 
increase in the price of foodstuffs during the same period. 
Separate figures showing the compensation of salaried em- 
ployes prior to 1900 are not available because intermingled 
with the salaries of officials and in that condition not of any 
service in this investigaton. 

The figures here given, touching salaries of employes and 
wage workers, relate only to manufacturing industries, 
because these are so tabulated by the Department of Com- 
merce and Labor. There is , however, another large and 
important contingent of which we may also have for our 
enlightenment some figures, albeit in another form. These 
refer to the railroad employes. The figures taken from the 
statistical reports of the Interstate Commerce Commission 
are printed in the Department of Commerce and Labor's 
abstract, and cover the period between 1892 and 1910 in- 
clusive. There are no figures given for the years 1893, 
or 1895, but beginning with 1896 we have the figures 
for each year thereafter during the period. 

In 1892 the average pay of the wage workers in the 
employ of the railroads of the country was $2.06 a day. 
In 1910 it had increased to $2.48' a day, showing an in- 
crease of 42 cents, or 20.4 per cent for the period. The 



250 WHY THE CAPITALIST ? 

locomotive engineers received the highest pay and also got 
the highest raise, both in amount and in percentage. In 
1892 they received an average of $3.68 per day. In 1910 
their pay was $4.55, an advance of 87 cents per day, or 
23.6 per cent, or 3.2 per cent more on the dollar than the 
average railroad wage workers got. Excluding the engi- 
neers the railroad workers got an average raise of 20 
per cent during the period between 1892 and 1910. 

Bulletin 113 of the United States Bureau of Labor Sta- 
tistics gives a table of simple and weighted relative prices 
of the 15 food articles for each year from 1890 to Decem- 
ber, 1912, taking the average prices for 1890-1899 as the 
standard for comparison and as the equivalent of 100.0. 
Here is the average for the United States: 

Relative prices weighted accord- 
Simple Average Relative Prices. ing to average consumption. 
Year. Amount. Year. Amount. 

1890 102.0 1890 IOI.9 

1891 103.6 1891 103.4 

1892 loi . 7 1892 loi . 6 

1893 104.6 1893 104. 1 

1894 99-5 1894 99.2 

1895 97-2 1895 97.1 

1896 94.9 1896 95.2 

1897 96.4 1897 96.7 

1898 99-4 1898 99.7 

1899 100.6 1899 100.8 

1900 102 . 9 1900 103 . 

1901 109.5 1901 108. S 

1902 116. 8 1902 114. 6 

1903 116. 9 1903 114. 7 

1904 118. 3 1904 116. 2 

1905 118. 3 1905 116. 4 

1906 122.4 1906 120.3 

1907 138.0 1907 125.9 

1908 132.5 1908 130. 1 

1909 140.3 1909 137.2 

1910 148.5 1910 144.1 

1911 146.9 1911 143.0 

1912 157-9 1912 154-2 



THE CLAIM THAT CONDITIONS ARE IMPROVING 251 

The wages in the manufacturing industries jalre not 
stated for each year and we are therefore unable to con- 
sider their yearly changes. We are shown, however, that 
these wages declined from 1890 to 1900 to the extent of 
1.6 per cent. The foregoing table shows that the differ- 
ence in food prices advanced at the same time 1.1 per 
cent, notwithstanding the reduction in wages. Dluring 
this period there was a great deal of fluctuation, owing 
to the "hard" times and the full and normal working of 
our system of society was so intricate and involved that 
we cannot follow it here without becoming tedious to no 
profit. We find that in 1905 wages in the manufacturing 
industries had risen 9 per cent above those of 1900, whilst 
the foregoing table tells us that the rise in the prices of 
necessary food stuffs was 13 per cent. By 1910 wages in 
these industries had gone up 8.5 per cent for the five years, 
and the necessary food stuffs 24 per cent. Taking the 
twenty year period, whilst these wages in 1910 were 16.4 
per cent higher than in 1890, the price of food, averaged 
according to consumption, was 41 per cent higher. 

A better understanding, however, can be had by show- 
ing the average wages of the railroad workers in dollars 
and cents as computed from the figures we have, in con- 
nection with the relative weighted prices of food according 
to the table. Here it f ollowis : 

In 1892 wages were 2.06 — foodstuffs 101.6 
In 1894 wages were 2.025 — foodstuffs 99.2 
In 1896 wages were 2.02 — foodstuffs 95.2 
In 1897 wages were 2.01 — foodstuffs 96.7 
In 1898 wages were 2.05 — foodstuffs 99.7 
In 1899 wages were 2.04 — foodstuffs 100.8 
In 1900 wages were 2.06 — foodstuffs 103.0 
In 1901 wages were 2.07 — foodstuffs 108.5 
In 1902 wages w6re 2.10 — foodstuffs 114. 6 
In 1903 wages were 2.17 — foodstuffs ii4«7 
In 1904 wages were 2.24 — foodstuffs 116. 2 
In 1905 wages were 2.26 — foodstuffs 116. 4 



252 WHY THE CAPITALIST ? 

m 1906 wages were 2.26 — foodstuffs 120.3 

In 1907 wages were 2.39 — foodstuffs 125.9 

In 1908 wages were 2.44 — foodstuffs 130. i 

In 1909 wages were 2.43 — foodstuffs 137.2 

In 1910 wages were 2.48 — foodstuffs 144. i 

This shows an advance of 20.4 per cent in the average 
railroad men's wages in 18 years, and an advance of 41.8 
per cent in the price of food stuffs during the same time. 
The wages of the railroad workers, exclusive of the loco- 
motive engineers, advanced 20 per cent; that of the loco- 
motive engineers advanced 23.6 per cent. Compared to 
the advance in price of the necessaries of life, even the 
advance of the locomotive engineer's wages has a lean 
and emaciated look. 

The wage earner is constantly learning to manage with 
a little less. The morgan thereby constantly gets more 
and more surplus values. This squeezing process is not 
applied to the wage worker alone, but to every person who 
renders any service of value to society for the living that 
he or she gets. 

If the true measure of the worker's wages is its pur- 
chasing power, then the wages of the workers have in 
truth declined, notwithstanding the showing made by the 
covinous money terms so well suited to dupe superficial 
observers. 

If wages in the manufacturing industries bad kept pace 
with the cost of living, they would have advanced 41.8 
per cent during the period between 1890 and 1910. That 
would have been just keeping even. But these wages ad- 
vanced only 16.4 per cent in money terms. This means 
that actual wages were reduced 1'^.4 per cent, through the 
depression of the purchasing power of the money tokens. 

During the ten years intervening between 1900 and 1910, 
to which our data on salarried employes is restricted, these 
salaried employes in the manufacturing industries in like 



THE CLAIM THAT CONDITIONS ARE IMPROVING 253 

manner suffered a reduction in their salaries amountng to 
19 per cent. 

The reduction suffered in like manner by the average 
railroad v^orker during the 18 years betv^een 1892 and 
1910, according to the figures furnished us by the Inter- 
State Commerce Commission, amounted to 15.5 per cent. 
Our railroad data covers a period of 18 years, and re- 
lates to 16 classifications of v^ork. In 1892 there v^ere 
815,311 persons employed by the railroads of the country, 
excluding officers, and 1,684,532 in 1910. 

In 1892 the general office clerks employed by the rail- 
roads received $2.23 per day, and in 1910 they received 
$2.40, an increase of 17 cents, or 7.6 per cent in money 
terms. But as the retail price of the necessaries of life 
had advanced 41.8 per cent, these workers suffered an 
actual reduction of 24 per cent in their pay. During this 
period the pay of the station agents went from $1.82 to 
$2.12, a raise of 30 cents, or 17.5 per cent in their nominal 
wages, and an actual reduction in their real wages of 17 
per cent. The pay of the other station men went from 
$1.68 to $1,84, a seeming increase of 16 cents, or 9.5 per 
cent, and an actual reduction of 22.7 per cent. The pay 
of the enginemen rose nominally from $3.68 to $4.55, being 
an increase in the figures of 87 cents, or 23.6 per cent, but 
an actual decrease in pay, amounting to 12.8 per cent. The 
firemen received $2.08 in 1892, and $2.74 in 1910, being 66 
cents more, or a raise of 31.7 per cent in name, but an 
actual reduction of seven per cent in pay. The conductors 
received $3.08 in 1892 and $3.91 in 1910, an increase of 83 
cents or 27 per cent in their pay envelopes, but an actual 
decrease of 10 per cent. The other trainmen received $1.90 
in 1892 and $2.69 in 1910, a difference of 79 cents or 41.5 
per cent. These are the only ones that did not suffer a sub- 
stantial reduction. They came out nearly even. Their loss 
was less than three-tenths of one per cent. The machinists 



354 WHY THE CAPITALIST ? 

received $2.29 in 1892, and $3.08 in 1910, an increase of 
79 cents, or 35 per cent in appearance, but an actual reduc- 
tion of 4.8 per cent. The carpenters in 1892 received $2.08 
and in 1910 $2.51, a seeming advance of 43 cents or 20.7 
per cent, but an actual reduction of 14.8 per cent. The 
other shopmen in 1893 received $1.72, and in 1910, $2.18, a 
seeming advance of 46 cents, or 26 per cent, but an actual 
reduction of 11 per cent. Section foremen received $1.76 
in 1892 and $1.99 in 1910, a seeming increase of 23 cents, 
or 13 per cent, but an actual decrease of 20 per cent. Other 
trackmen received $1.22 in 1892 and $1.47 in 1910, a seem- 
ing advance of 25 cents or 20.5 per cent, but an actual re- 
duction of 15 per cent. The switchtenders, crossing ten- 
ders and watchmen received $1.80 in 1892, and $1.69 in 
1910, a reduction in their pay envelope of 11 cents a day, 
or 6.5 per cent during the 18 years, an actual reduction of 
34 per cent. In 1892, telegraph operators and despatchers 
received $1.92, in 1910 $2.33, an increase in figures amount- 
ing to 41 cents, or 21 per cent, but an actual reduction of 
14.7 per cent. In 1892 the "employes account floating 
equipment" received $2.03 and in 1910 $2.22, a seeming 
advance of 19 cents or nine per cent, but an actual reduc- 
tion of 23 per cent. All the other employes and laborers, it 
is stated in the report of the commission, received $1.68 
per day in 1892 and $2.01 in 1910, a seeming advance of 33 
cents, or 20 per cent, but an actual reduction of 15 per cent. 
Thus it appears from all of the data obtainable that the 
compensation of all the workers, with the single exception 
stated, underwent a continuous reduction through the 
period covered by the governmental reports. It also ap- 
pears conclusively that all of the strikes, turmoils and in- 
dustrial strifes, often bordering on civil war, did not suc- 
ceed, in fact could not succeed, in raising real wages, 
namely, the purchasing power contained in the pay en- 
velope. All that they accomplished and all that they could 



THE CLAIM THAT CONDITIONS ARE IMPROVING 255 

accomplish, was forced compromises with aggression. Had 
it not been for the wresting of these compromises, there 
can be no doubt that the full amount of the reduction in 
the purchasing power of wages through the depression of 
the purchasing power of the worker's money tokens, would 
have been the full 29.44 per cent during the 20 years; in 
other words, the depression would have been to the full 
extent of the advance of the 41.8 per cent in the price of 
necessaries. 

It is well to remember here that in expressing reductions 
and advances in percentages we are apt to lose sight of 
the important difference between the amount of a reduction 
and the amount of an advance, though expressed in the 
same sort of terms. Our means of expression in this 
respect is defective and deceptive. For instance, if we take 
an advance of 50 cents on one dollar, we shall have $1.50. 
That is an advance of 50 per cent. But if we deduct 50 
cents from $1.50, the reduction is one of only 33 1-3 per 
cent, though we have only one dollar left. The amount in- 
volved is 50 cents each time, yet in the one case it is ex- 
pressed as 50 per cent and in the other as 33 1-3 per cent. 

A man who received one dollar a day in 1892 should 
have $1,418 per day in 1910 to keep even. If his wages 
remained at one dollar in 1910, he would be 41.8 cents 
short. Yet when we desire to express in terms of per- 
centage the amount of the reduction in the purchasing 
power of his wages, we are compelled to say it was 29.47 
per cent. His dollar will in 1910 buy only as much as he 
could buy for 70.53 cents in 1892. To give him this 29.47 
cents more, that is, to advance him to $1.2947, would not 
place him where he was formerly, because the 29.47 cents 
would in 1910 buy only as much as 17.52 cents would buy 
in 1892, which would still be short of his dollar of 18 years 
before. Before he could be even, his dollar of 1892 would 
in 1910 have to be raised to $1,418. This would be an ad- 



/ 



256 WHY THE CAPITALIST? 

vance in his pay envelope of 41.8 cents on every dollar. If 
he does not get that amount, he will be the loser of 41.8 
cents. Yet we are required to say that the reduction that 
he suffers amounts to 29.47 per cent. 

The information afforded us by Bulletin 113, it is true, 
relates only to 15 of the necessaries of life. But we are 
justified in assuming that the advance in the average retail 
price of each one of the other necessaries of life was of 
equal proportion. Our common experience and observation 
bear this out. 

This means that a carpenter working for a railroad in 
1892 received $2.08 a day, the whole of which it is reason- 
able to assume he needed to provide himself and family with 
the necessaries of Hfe. In 1910 these necessaries of life had 
advanced 41.8 per cent. This carpenter, therefore, in order 
to be in the same relative position needed $2.95 per day. 
Instead of that, he got only $2.51. He was therefore 44 
cents short. Expressed in terms of percentage, the pur- 
chasing power of his wages was depressed 14.75 per cent, 
in spite of the specious rise in figures that took place during 
the 18 years. 

Let us take one more example, namely, that of the loco- 
motive engineers. They received $3.68 per day in 1892. 
As the necessaries of life advanced in price 41.8 per cent 
during the next 18 years, the wages of the locomotive en- 
gineers in 1910 ought to have been $5.22 per day, but in- 
stead of that we see that they received only $4.55. This 
is 67 cents less than they should have had to keep even. 
Therefore, the locomotive engineers suffered an actual re- 
duction in the purchasing power of their wages amounting 
to 12.8 per cent during the 18 years in spite of the raise 
in the figures expressing their pay in money terms. It ig 
unnecessary to make any further analysis here to illustrate 
the point. It is merely a matter of arithmetic. 

The British Board of Trade made an inquiry in 1905 into 



THE CLAIM THAT CONDITIONS ARE IMPROVING 357, 

working-class rents and retail prices of necessaries, to- 
gether with the rates of wages in certain widespread occu- 
pations, taking within its scope the largest possible number 
of controlling localities in the British Islands. There were 
88 localities covered, including London. The inquiry ex- 
tended from Dover to Limerick, and from Plymouth and 
Devonport to Aberdeen. There were three classes of occu- 
pations embraced in the inquiry. The first class was that 
of the building trades, embracing bricklayers, carpenters 
and joiners, masons, plumbers, plasterers, painters and la- 
borers. The second class was that of the engineering 
trades, embracing fitters and turners, pattern makers, iron 
molders and laborers. The third class was the printing 
trade, embracing compositors. 

The inquiry was repeated in 1912. The report com- 
pared the results obtained in 1912 with those of 1905. The 
comparison shows the steady rise in the prices of neces- 
saries, weighted according to consumption, and the same 
lagging behind of the money tokens that the worker gets 
in his pay envelope. The constant and continuous reduc- 
tion in the worker's actual wages, namely, his purchas- 
ing power, is, according to the record, as little open tq 
doubt in Great Britain as it is in the United States. 

The report says in its introduction : "It will be observed 
that no attempt has been made to show the course of wages 
except for the period 1905-1912 in a limited number of oc- 
cupations in which men find employment in nearly all 
towns." Again the introduction says : "A two-fold purpose 
is served by the present Enquiry. As in 1905, it permits of 
a comparison of the relative levels of rents and retail prices 
and of the rates of wages in the selected trades in the sep- 
arate towns. Further, it records the amount of change in 
rents and retail prices, and in rates of wages in the selected 
trades between 1905 and 1912." 

It is to be regretted that the British Board of Trade did 



258 * WHY THE CAPITALIST? 

not extend its inquiry into the mining, manufacturing and 
agricultural districts. But we must be thankful for all that 
we can get from the morgan and his system. 

The summary of this British report says that the advance 
of the retail prices of food and coal, weighted according to 
consumption, ''in 80 of the 88 towns varied from 10 to 18 
per cent. In 38 towns it was 13, 14, or 15 per cent. The 
minimum advance was 7 per cent at Portsmouth, and the 
maximum advance was 20 per cent at Stockport." The re- 
port says : "The somewhat wide range of changes in prices 
is, in the main, a matter of locality; the greatest mean in- 
crease was in Lancashire and Cheshire (15.8 per cent) and 
the least in the Southern Counties (9.8 per cent). In Lon- 
don the increase amounted to 12 per cent in the inner and 
middle zones, and 10 per cent in the outer zone. For the 
other geographical groups, the mean increases fell within 
the narrow limits of 12.4 and 15 per cent." 

"The mean of the changes in prices (of necessaries) in 
the 88 towns amounts to 13.7 per cent, and this percentage 
holds true if the figures for the separate towns be weighted 
in accordance with their populations and London be 
omitted; if London be included, the weighted percentage 
increase is reduced to 13 per cent." 

"There was an increase in rents and retail prices com- 
bined, between 1905 and 1912, in every town investigated. 
The amount of the advance ranged from 5 per cent at Swin- 
don to 17 per cent at Waterford, but in 58 of the 88 towns 
it amounted to 10, 11, 12 or 13 per cent. For 16 towns, 
mainly in the South and East of England, the increase re- 
corded was less than 10 per cent, and for 14 towns, mainly 
in Lancashire and Cheshire, it exceeded 13 per cent. 
Grouping the towns geographically the greatest mean per- 
centage increase occurred in Lancashire and Cheshire 
(13.3) and the minimum increase (of 8 to 9 per cent) in 
London and the Southern Counties. 



THE CLAIM THAT CONDITIONS ARE IMPROVING 259 

"Taking the mean of the percentage changes between 
1905 and 1912 in rents and retail prices combined in each 
of the 88 towns, an increase of 11.3 per cent is arrived at, 
and if the figures for the various towns be weighted in ac- 
cordance with their populations the resultant average is 
almost unchanged, viz., 11.3 per cent if London be omitted. 
The inclusion of London, however, with its six million in- 
habitants, would reduce the percentage increase for rents 
and retail prices combined to 10.3 per cent. 

"The data which have been collected in regard to the 
cost of clothing during the years 1905-1912, show that the 
price of clothing, including boots, has risen during the past 
eight years. No general percentage increase can be given, 
but it seems clear from the various tests applied to both 
the raw materials and the manufactured articles, at dif- 
ferent stages, that the rise has not been much less for the 
same quality of article than for food, coal and rent com- 
bined." 

As to wages, the report summarizes that "although in 
many towns rates of wages were at the same level in Octo- 
ber, 1912, as in October, 1905, there was, on the whole, a 
distinct upward movement in each of the selected trades 
between the dates of the two Enquiries. The means of the 
percentage changes recorded for the separate towns show 
increases as follows: Building trade, skilled men, 1.9, la- 
borers, 2.6 ; engineering trade, skilled men, 5.5, laborers, 
3.9 ; printing trade, compositors, 4.1.'' 

Thus we have it again from morgan sources that whilst 
the prices of living necessaries went up 10.3 per cent in 
Great Britain during a period of 8 years, that which is 
called wages advanced, in the most favored occupations, 
5.5 per cent only, and in the least favored occupation, 1.9 
per cent only. This means that during the eight years, the 
actual wages, namely the purchasing power of the pay en- 
velope, declined. The skilled men in the building trade 



260 WHY THE CAPITALIST? 

found that the same amount that they could buy in October, 
1905, for $10,00, cost $11.03 in October, 1912. For this 
their $10.00 had been raised to $10.19. In other words, 
they had suffered an actual reduction of 84 cents in every 
$10.00 of their wages of the year 1905, despite the fact that 
the figures opposite their names on the pay roll were larger. 

The laborers in the building trades suffered a reduction 
in the same way. Their $10.00 of 1905 that should have 
been $11.03 in purchasing power in 1912, were only $10.26, 
So they found themselves 77 cents short. They had to 
manage with the smaller sum, and are now told by the 
British Board of Trade that their wages are having "a dis- 
tinct upward movement." 

The skilled men in the engineering trade fared better 
than all. These got a 5.5 per cent raise in their pay en- 
velope with which to meet the 10.3 per cent raise in neces- 
saries. So their $10.00 of 1905 that should have been $11.03 
were $10.55. Therefore their reduction on every $10.00 
of 1905 was only 48 cents. 

The printers and the laborers in the engineering trades 
stood pretty close together. The printers lost 62 cents from 
the purchasing power of every ten dollars in wages of 
1905, and the engineering laborers 64 cents. 

No one will accuse any of the men who gathered the data 
of this chapter, either in Great Britain or in the United 
States, with trying to favor the gentile as against the m.or- 
gan. 



CO'NCLUSIOiN. 

The gentiles are all slaves of the morgan under his sys- 
tem. The personality of the morgan for the time being 
cannot be of the least consequence. Whether one man or 
another is the morgan, it is caesarism just the same; and 
whether he was lifted on the shield of the Pretorian 
Guards, was placed in his position as heir of his father, 
"got there" by bribery or by murder or by some manner that 
might be deemed meritorious, cannot make the dominance 
any the less caesarian. 

Those gentiles that are of the second order and popu- 
larly called the middle classes, those that get their liveli- 
hood by some work, eked out and assisted by a little "cap- 
ital" with which they exploit the gentiles of the first order, 
are slaves under the morgan system just as the gentiles of 
the other orders are. If the limbs and bodies of these mid- 
dle class gentiles in the second order be not so much galled 
and calloused by their bonds and manacles, the calluses on 
their minds make up for it many times. 

The so-called middle classes imagine themselves cap- 
italists, although they are compelled to get their livelihood 
in large part by their personal exertion. Much of that per- 
sonal exertion is devoted to driving and oppressing the 
gentiles of the first order; and even at that, they do not 
get anything like what they should have out of life com- 
pared to the amount of exertion they put forth, or com- 
pared to what they would get were they able even without 
any "capital" of their own to direct their efforts entirely to 
value-producing ends, instead of directing them in most 
part to value-filching ends as at present. The so-called 
middle classes constitute the buffers between the morgan 
and the gentiles of the first order. The wearing life of th^ 

261 



263 WHY THE CAPITALIST ? 

forager is theirs. They are subjected to pressure from 
both sides. They are constantly ravaging the resisting gen- 
tiles of the first order, and are in their turn ravaged by the 
morgan of by far the greater part, if not all of their 
plunder. 

The gentiles of the second order perform the service of 
hunting-dogs for the morgan. They are his beagles, hounds 
and retrievers. They get but a small morsel of the prey 
that they bring to their master's bag. 

Although the position of the gentiles of the third order 
exposes them to the most contemptuous disparagement, 
tbeir true interest as gentiles is v^ith the gentiles of the 
first and second orders. There can be no emancipation 
of any one order of the gentiles from the thralldom of 
to-day v^ithout the emancipation of all three orders. All 
three orders of the gentile class are enslaved. Be it re- 
membered that Master Dawkins, "The Artful Dodger," 
Master Bates and Bet and Nancy v^ere all of them also 
the victims of Mr. Fagan, the ''respectable old gentle- 
man" that Dickens tells us about, although they accepted 
him for their pattern and teacher in their chosen business 
of lying and stealing. Their choice was not a free choice, 
but it was imposed upon them by their environment. 

I stated above that the calluses on the minds of these 
gentiles of the second order called the middle classes make 
Mp for the absence of calluses on their limbs and bodies. 
There is nothing more pitiable than the average mind 
found among the shop-keepers and wage-slave drivers. 
Their habits of thought, th'eir occupation and environ- 
ment have so foreshortened their minds that they canno^ 
view anything otherwise than with an eye to individual 
gain. They measure everything by the dollar. 

The tribute-taking morgan, whether slave-catcher, slave- 
owner, proprietor of baronage or of mines or of factories, 
or of any of the resources of nature or the means of pro- 



CONCLUSION 263 

duction or the agencies or means of distribution or ex- 
change, in all his multifarious masks, is worse than an un- 
necessary incumbrance in this day. and age. His one aim 
and object has always been and is the seizing of power 
over others. It cannot be even said to his credit that his 
rapacity was or is for his own personal gain or benefit, 
though he may stupidly think that to be the case. When 
a man has everything that he can possibly want for his 
personal comfort and enjoyment he can gain nothing addi- 
tional by claiming the right of disposal over more. When 
he acquires such power as that, he gets only one thing, 
and that is power to domineer over other people's lives. 

The morgan's dominance is the cause of all that society 
is suffering from to-day. All we need is to understand 
this. Then we shall soon find ways and means to throw 
off his rule. We are ground into the earth by that power 
which intercepts production, seizes the resources of nature 
and the tools, and thereby dictates the conditions under 
which the rest of mankind must live. 

Most gentiles are still obsessed with the idea that we 
cannot get on without a morgan for our master. However 
that may have been in ages past, we do not need him now. 
The feudal lord ostentatiously made himself necessary as 
a sham protector for a long time after all real need for his 
services had ceased. But there came a time when he could 
not make himself seem necessary any longer, and he had 
to go. He was sloughed off just as nature sloughs off all 
dead limbs and useless members. 

When a limb on a tree dies, the wood in that limb grad- 
ually loses its tensile strength until finally a gust of wind 
blows it down, or it breaks off and falls of its own weight. 
A competent forester will not wait until the dead limb 
falls of its own weight. He detects the dead wood long 
before it is ready to fall and notes when the limb begins 
to die. He knows then that if this useless wood be per- 



264 WHY THE CAPITALIST ? 

mitted to remain on the tree it will impair the growth of 
the tree as well as its health. So the forester removes the 
dead and dying wood as fast as it appears. He does not 
thereby hamper or impede nature. He removes the ob- 
structions from her course so that she may operate more 
freely in her work of production. 

The farmer in cultivating his field does not obstruct the 
course of nature. He wants more potatoes. His efforts are 
to clear his field of the things and growths that draw sus- 
tenance away from the potato plants, or otherwise prevent 
them from bearing. 

The morgan is dead wood now, he is an obstruction, an 
encumbrance. He impedes and obstructs the further 
growth of human society. Worse than that, this dead sub- 
stance has become a foreign substance, as much out of 
place as a thorn in a living hand. It has already produced 
a festering sore. 

The morgan has not for a long time furnished and does 
not now furnish any "brains" for useful work. He does 
not and has not for a long time furnished any of the 
"brains," mediocre though they be, that sustain his in- 
stitution. These "brains" are all supplied for hire by the 
mercenary gentiles of the third order. 

The gentiles supply all of the workers, including both 
the brain workers and the manual workers, if we concede 
here an essential difference. They supply the artists, inven- 
tors, writers, teachers, architects, engineers, superin- 
tendants, mechanics, laborers, farmers, miners, clerks, por- 
ters and distributors. They furnish the great mass of 
workers also that do the wholly unnecessary work that the 
morgan's rule dictates. On the other hand, the activities 
of the morgan are all designed and calculated for show, 
and to dominate industry and thereby to domineer over the 
human race. 

There is not the slightest reason to suppose that those 



CONCLUSION 265 

who now do all the work, both mental and physical, for 
the reward of a bare living, would not be able to do the 
same work, as well as they do it now, if we cut off the 
morgan's power and let him take his place among the gen- 
tiles. All indications are that the value-producing gentiles 
will be able to do very much better when the incubus shall 
have been removed. 

With the emancipation of labor from the bonds of use- 
less and wasteful work and the opening of more and greater 
opportunities for useful and productive occupation, that 
would result from the tearing away of the morgan's bar- 
riers and drains, there would come a new dispensation. 
With the morgan dethroned, one general result would be 
inevitable. All artificial restrictions for purposes of private 
profit would fall away, resulting in a natural scientific regu- 
lation based upon an unhampered understanding. It 
would not and could not be for any purpose of controlling 
prices or markets. It could only be for the purposes of 
natural and necessary production, for there would not be 
any private countervailing interest. 

With the enormous profits of the morgan eliminated, and 
production emancipated from his rule, there would be such 
an abundance for all, as no man to-day can compute or 
appraise. No one could then strut over the necks of others. 
In the absence of any interest adverse to co-operation there 
would not and could not be any influence adverse to co- 
operation. It is perfectly safe to say that every one, even 
the mediocre, could live upon a basis that under present 
conditions requires an income of $5,000.00 a year for each 
household. The number of those in the United States who 
can have so good a living now is less than one per cent. 

When the national law taxing incomes over $3,000.00 
a year of the unmarried and over $4,000.00 a year of the 
married, was recently enacted, the news despatches stated 
that it was estimated by the administration at Washington 



266 WHY THE CAPITALIST ? 

that only about 425,000 of the 100,000,000 people in the 
United States could be required to pay the new tax. 

It is futile to try to give any detailed description of the 
future state or society. When James Watt invented the 
steam engine, he could not have foretold the results that 
v^e now see of the utilization of the power in the expan- 
sive property of steam. Neither he, nor any one else 
could have described a modern express train or trans- 
atlantic steamer. It would have been silly and unfair to 
have asked him to do so. It would have been equally 
foolish if Watt had tried to foretell all that the develop- 
ment of steam power has brought. Yet, nothing that Watt 
could have been led into saying could have in the least 
degree detracted from the efficacy of steam power as a 
civilizing influence. 

When those of our ancestors who "were not content with 
the crab apple, or the stunted horse, or the pig, or the ox 
of their day, began to study those subjects methodically 
and to apply scientific knowledge thus obtained, and to 
that extent to rely less upon mere luck for better crops 
and better fruit, better meat and better work-animals, 
they could not have described any of the many kinds of 
apples that are produced to-day, or any of the better 
work-animals now available. 

When a man sets out an orchard, he cannot give a de- 
tailed description of the trees that in later years he ex- 
pects to gather fruit from. If he has made an intelligent 
study of arboriculture, he will, at the most, be able to give 
only such a general forecast as to make it reasonably safe 
to assume that the results will pay for the labor and out- 
lay in planting and attending the orchard. 

No artist could paint a portrait of a man as he will be 
twenty-five years hence, just from viewing the new-born 
child. 

The wildest, or most disorderly portrayal by anyone, of 



CONCLUSION 261! 

the society that will result from the taking over of our 
own, and the administering of it for our own common 
good, cannot afford the least argument against our right 
to take over our own. Detailed forecasts of the future so- 
ciety, so far as present discussion is concerned, might all 
be placed in the same category with the idle talk of "What 
I would do if I were a multi-millionaire." 

There is but one primal thing to do, and that is to de- 
throne the morgan. This can be done only by abolishing 
all property rights in the resources of nature and the 
means of social production. From land owner to banker, 
the morgan's reign must cease. 

It is necessary here to understand also that with the 
overthrow of the morgan's rule it will be vitally necessary 
to have a sane and scientific administration of affairs for 
the common good, introduced at once. This must be, in 
order to prevent a recurrence of the morgan's reign. The 
essential feature of morgan rule is authority exercised 
''from above." The basic principle of this new administra- 
tion must be that all authority must come up from the 
"bottom," as it did in the times of our gentile ancestors. 

Unless such a principle of administration be understood 
and introduced at once when the morgan is overthrown, 
the morgan will return to power. The cunning and strate- 
gem of politicians will restore him. If any one, or any set, 
be entrusted with the exercise of authority to formulate 
and enforce policies of administration, it must be ex- 
pected that he or they will at once begin to construct a 
political machine, or organization, to domineer, to en- 
trench himself or themselves and to perpetuate them- 
selves in that authority. Therewith and in them the mor- 
gan would appear again. 

The administrative policies could not be otherwise than 
simple when all of the tangled skein of "business" shall 
have been thrown aside. Then too a higher intelligence in 



268 WHY THE CAPITALIST? 

all men must mevitably result from a better life and more 
leisure. Under such conditions the deciding upon adminis- 
trative policies, and upon directions for those chosen to at- 
tend to the co-ordination of the different departments of 
any industry and of the different industries, should not 
present any difficulties whatever. With the matters of each 
industry left to the decision of those in that industry, wq 
should soon have all of our affairs administered by experts 
in their respective lines. 

The rest will follow as a natural consequence. When 
there shall be no longer any private ownership in the re- 
sources of nature or in the means of production, there will 
not be any legitimate interest in private control. When 
there shall be no opportunity for anyone to hold the re- 
sources of nature or the means of production, as his private 
property, vast private fortunes will be impossible. There 
will be no lure to the acquisition of vast private fortunes. 
Though every man may then be conceded the right to buy 
and own an automobile, he will not have the right to ac- 
quire or own the automobile factory, or to corner the au- 
tomobile market. Though every man may then own as 
many suits of clothes as he likes, he will not be permitted 
to own the woolen mills or the cotton mills or any other 
mills or factories where other men work, or to seize and 
own all of their product so as to intercept distribution or 
to oppress others or to take private profit from the labor 
of others. It will make no difference how much ''money" a 
man may have, he will not be able then to acquire any of 
the sources that supply the things that the rest of humanity 
must have to satisfy their wants. He will have no more 
right or opportunity to acquire such things, as his private 
property, than he has today to acquire ownership of the 
Capitol building at Washington or the Po'st Office, or any 
other public building. 

One might reasonably expect that under such condition? 



CONCLUSION 269 

a great fortune, so-called, would have no attraction, that 
man's activities would be turned from the grabbing and 
gambling business to the arts of producing the best comfort- 
affording and pleasure-giving goods. It will not be un- 
reasonable to expect that the haggling, bartering and 
huckstering of to-day will cease because antiquated and 
outgrown, and a waste of time and labor; that distribution 
will be scientific and simple, that each member of society 
will receive according to his needs, and perform according 
to his ability. 

We must bear in mind that every human being is en- 
titled to his share of the free goods of nature whether he 
works or not. No one would think of shutting off the air 
from anyone, or of depriving him of sun-light or sun-heat 
or of water or of the pull of the earth that holds him to 
the planet simply because he does not work. No one would 
seriously urge that society has a right to inflict any such 
pains and penalties. The right of every individual to par- 
take freely and without measure of the things enumerated 
will be conceded by all. There is however no difference 
between our right to those things and our right to the rest 
of the free goods in nature's vast store-house. 

The robin goes to market without any money, without 
any collateral security, and without credit. Yet he brings 
home food for his family. He builds his nest without 
renting or buying the land or the fork in the tree, and 
without paying anything for the raw material. The food, 
the tree and the raw material are furnished by nature, free 
for all robins to take according to their needs. No robin 
takes any more. No robin can take any more. No robin 
asserts a property right in any more than he and his family 
can enjoy. No robin forbids another robin to take that 
which he himself and his family do not need for their com- 
fort and their enjoyment of life. No robin finds pleasure 



270 WHY THE CAPITALIST? 

in forbidding other robins from taking that which he him- 
self does not and cannot want. 

Are the rights of human beings any less? Are these 
rights rendered less sacred because entangled with arti- 
ficially created considerations? If it be conceded for in- 
stance that the usefulness and the comfort-giving qualities 
of the free goods of nature are increased from say 100 
units to 500 units by human effort and attention, and if it 
be further conceded that some sane and able-bodied man 
would refuse to work under condtions that will insure to 
him the undisputed ownership of all the value that he can 
produce, yet with all that, this unimaginable lazy man is 
still entitled to receive and to have his full share, or the 
equivalent of his full share, of the 100 units provided 
spontaneously by nature. If he can content himself with 
his share of nature's 100 units, as the robins do and as 
Diogenes did, who can justly gainsay him the right to do 
so? Diogenes, we are told, was content to sleep under a 
tub. Yet who will say that he was not within his right? 
All the known world of that time honored Diogenes. Still 
he had nothing and did not work at anything considered 
worth while by the morgan. Diogenes would be jailed as 
a vagrant were he living among us to-day. 

We have no reason whatever to believe that there ever 
will be so many Diogeneses or Rip Van Winkles as to have 
any considerable influence upon society, or that such an 
influence would be other than beneficial. 

The natural inclination and imperative need of every 
human being is to be occupied. Drudgery kills. Purpose- 
ful effort, without wearying, is pleasurable. Many of us 
are denied that pleasure by the owner of the material and 
the tools needed for work. Many are permitted only oc- 
casional and casual employment and that only under con- 
ditions that are wearisome. All that get employment are 
despoiled of fully five-sixth of what they produce. All are 



CONCLUSION 271 

deprived of the pleasure that should be found in healthful, 
fruitful employment. Instead of having that pleasure, 
they are tortured into producing more and ever more for 
the morgan's private profit. Therefore steady employ- 
ment means steady drudgery for the great majority of 
productive v^orkers. 

The abolition of all property or private control in the 
resources of nature and the means of production will as a 
matter of course have a far-reaching effect on the functions 
of what we now call the state. It is well, here, to be re- 
minded that the state has two chief, or general functions, 
namely, governmental and administrative. The govern- 
mental is at present the principal and predominating func- 
tion. This is to maintain the existing state of things by 
force, either applied or paraded. It is seen in the sheriff's 
truncheon, in the policeman's club, in the soldier's bayonet ; 
it is seen in swords, muskets and cannons, all directed by 
the courts, back of which are the statute-making legisla- 
tures, the governor, the president, the king. 

Over ninety per cent of the activities of the govern- 
mental side of the state arise out of matters attributable 
more or less directly to the private ownership of the re- 
sources of nature and the means of production. Of the re- 
maining ten per cent of the governmental business, it 
might well be said that the greater part is due indirectly 
to the same cause. A very small percentage of human ac- 
tivity calling for adjudgment or avengement, is due to 
"natural lawlessness" or "perversity of human nature" so 
far as anyone can now show. And even this small abnor- 
mality may be due to pathological conditions. 

When ninety-five per cent of the occasion for the exer- 
cise of the governmental function of the state shall have 
fallen away, it would not be unnatural or surprising to see 
also ninety-five per cent of the governmental side of the 
state disappear, dry up and blow away, so to speak. We 



272 WHY THE CAPITALIST? 

should then have realized Thomas Jefferson's expressed 
ideal that the least government is the best government, in a 
much fuller sense than Thomas Jefferson could ever have 
dreamed. 

It would also be quite natural then to be without wars 
or thought of wars. Every war that ever was waged grew 
out of quarrels over private ownership of things that 
should not be owned privately. When there will be no 
more "vested" interests of the morgan to protect in those 
things, there will not be anything to fight about, and it 
will not be possible to force any more wars upon us. 

On the other hand, the state's functions of administra- 
tion, now secondary, would doubtless become by far the 
most important functions. Of course this could be a rich 
field for graft and corruption if there were contracts to 
let, or private "vested" interests to subserve. But as none 
of these things could be, there could be no graft or corrup- 
tion, there could not be any occasion for graft or corrup- 
tion. Statesmen could not control the patronage of even 
a street sweeper's job, for every man would have the right 
to work without the "aid" of a statesman to get a job for 
him. His right to work would be as secure as the right 
of a child to walk into a school and get an education. 

Another result might reasonably be expected, it seems 
to me would be inevitable. That would be the disappear- 
ance of the politician. There would be very little, or noth- 
ing for him to do, or to make even a hollow pretense of 
doing. When there are no longer any adverse private in- 
terests to subserve, no contractors' rings, no private profits, 
no self-serving deals possible, no one will think for a mo- 
ment of turning industry over to the management of alder- 
men, or of subjecting administration to law or ordinances 
enacted by politicians representing or misrepresenting terri- 
torial districts, instead of representing industries, occupa- 
tions or callings. There would be nothing in it for the 



CONCLUSION 273 

politician. The politician would probably be sloughed off, 
in short order, or in greater part at least. 

The management and regulation of the Post Office De- 
partment or of the life-saving service is not now in the 
hands of the men of "superior brains" in Congress. The 
Panama Canal was not dug by or under the supervision of 
congressmen. Large corporations do not entrust the ad- 
ministration of their business to men with no other quali- 
fications than those of being representatives of certain ter- 
ritorial districts. The public schools and fire departments 
in the cities are not conducted by or under the superin- 
tendence of aldermen representing territorial wards. If 
these gentry still have something of an evil influence, it 
does not mean that such influence would not be completely 
eradicated, sloughed off in the natural way, if not ampu- 
tated. 

The stream follows its own course when unobstructed. 
So here, in the absence of interests to determine a dif- 
ferent course, there seems to be but one general administra- 
tive policy possible. And that is to have the management 
of every industry, occupation or calling intrusted to those 
competent to manage that industry. That is the easiest 
way. And the most competent are those engaged in that 
industry, occupation or calling. That those engaged in 
the shoe industry for instance are more competent to 
manage a shoe factory than any one else can be needs no 
argument as a general proposition. They are most able 
to decide upon and choose such managers, agents and 
superintendents as productive operation may require. The 
same is true of all other industries, employments and occu- 
pations. 

Representatives from the various industries, occupations 
and callings could attend to all matters of co-ordination 
without any aldermanic fuss or feathers. Distributors 
could likewise attend to the distribution of goods. There 



274 WHY THE CAPITALIST ? 

could be no inducement for anyone to intermeddle in 
things outside of his line. He could gain nothing by so 
doing. 

The politician for the most part would be as much out 
of place as the cat in a strange garret. The laws would 
probably be so few and so much simpler than even the ten 
commandments are, that they could be voted upon without 
the intervention of the politician. Those running the ma- 
chinery of the governmental side of society would probably 
have very little to do, indeed. 

The great problem of crowded cities might also solve 
itself, or at least might do so in great part. The amount 
of human labor, human life and material that is now worse 
than wasted in the large cities, all as a consequence of the 
institution of private property in the resources of nature 
and the means of social production, is incalculable. 

"Back to the land" might very well have a different 
sound and meaning when there will be no more exploitation 
of labor, and when employment will no longer be casual ; 
when every man will have a right to employment and to 
receive all the value that he produces, besides his full 
share of nature's free goods, when no man can call him- 
self the private owner of immense tracts of fertile land, and 
drive others to choose between wage-slavery in occasional 
employment, and the performance of backbreaking work 
to pay rent, purchase-price or interest, for sterile hillside 
lots ; when agriculture, horticulture, stock-raising, etc., etc., 
will be conducted with the latest and best machinery and 
implements, under the latest and most scientific conditions, 
with social management ; when every man will feel and 
realize that he is part owner and will feel the incentive of 
personal participation in all the gain resulting from the 
best effort that there is in him, put forth in intelligent co- 
operation with others, to say nothing of the esteem of his 
fellows ; when there will be no master and no mere hand. 



CONCLUSION 275 

The marital relations will also very likely be much af- 
fected by the changed conditions. Marriage to-day is 
mostly a mere matter of convenience. Gentile women of 
the second and third order are taught to select their mates 
with a view of getting husbands that have the requisite 
gambler's ability to play the game so that they may be 
assured of "respectable" homes and livelihood. Gentile 
women of the first order are taught that they must try to 
get men that can "make" a living for them. Many women 
want only to make a commercially good match. Such is 
the teaching they receive. Men are influenced in taking 
wives by the desire to marry "right." What constitutes 
"right" varies in individual cases. There are millions of 
gradations, running all the way from a job to a million 
dollars in money. With the women of the morgan circle, 
it is a matter of social position based upon wealth. 

When every man and every woman will have a right to 
a good job, when the possession^by one of a million dollars 
will not give any advantage over another in getting a live- 
lihod, if we concede that a man might have a million, it 
seems plain that the consideration of such things will not 
and cannot enter, to any effectual extent, into the matter 
of selecting a spouse. It seems quite natural that men and 
women will then be drawn toward each other because of 
mutual personal attractions. Natural selections are likely 
to have freer play, the course of nature to be less diverted 
or obstructed than now in the chosing of a husband or a 
wife. Under such conditions more marriages are likely to 
be love matches and fewer are likely to end in the divorce 
courts. 

It may also well be that the endless clatter of coin and 
shuffle of paper money will be considered useless ; that the 
employment of thousands of human beings at the keeping 
of books of the mine and the thine of things, when there is 
an abundance for everyone, will be regarded as so much 



376 WHY THE CAPITALIST ? 

useless and unnecessary waste of labor. It may well be 
that all such antiquated methods of wasting labor and ma- 
terial will abrogated. It may well be that the difference 
between present methods and the methods .then in vogue 
will be like the difference between going into a cheap 
restaurant where every lump of sugar is counted and the 
stepping into the banquetting hall of the prosperous where 
no account is taken of the things consumed by the guests. 

These are all matters of administration and of detail. 
They do not effect substance or principle. 

It is of no benefit to discuss now the details or the 
machinery of an administration to be evolved in a society 
to result from an abolition of private property in the re- 
sources of nature and the means of social production. It 
should be sufficient to know that there could be no public or 
private interest adverse to its natural evolution. 

Nor is it of any importance to discuss now the method 
of getting rid of the morgan. Whether this be by an 
outright confiscation of his so-called property, with or with- 
out pensioning him off, or by condemnation proceedings 
and compensation, or if his compensation be offset by 
graded taxation. If he should be paid a sum from the 
surplus of gold, or in paper or bonds, it would only amount 
to an empty ceremony. The so-called money would not be 
of any value to him. He could not make any use of it after 
he had gotten all of the things of life that he could need 
or use for his comfort and personal pleasure. He could not 
buy up lands or railroads or mines or ships or telegraph or 
telephone lines or mills or factories or depots of distribu- 
tion or the supply of food or clothing or any of the other 
things needed by the rest of humanity. He would not have 
the right to acquire these things in quanities for the mere 
gratification of hoarding them or to exact profit, for that 
would be an interference with the free exercise by the 
commonwealth of its function of production and distribu- 



CONCLUSION 277 

tion. He would not be permitted to corner even the gold 
so that the rest of us could not get enough of it to fill our 
teeth or supply other needs. The morgan could only have 
all the material things that he might possibly need for com- 
fort and personal enjoyment. Beyond that, his *'money" 
could not readh, and therefore would be equivalent to mere 
*'stage-money." 

It is sufficient to forecast that when once we have 
abolished private property in social things, that our ad- 
ministration of these things cannot be for the purpose of 
private profit of any kind whatsoever. Private profit 
would, to an extent, be private property in the things from 
which the private profit is obtained, and would be hostile 
to democratic control and management. 

There can be but one aim and goal in the forward move- 
ment of society, and thiat is the complete overthrow of 
private ownership in the resources of nature and means of 
social production, and the inauguration of democratic ad- 
ministration in place thereof. Until that is achieved, there 
can be no peace. 



INDEX 



PAGE. 

Abolition of right to acquire 276 

Abundance for all 265 

Activities of the gentile of second order 31 

Activities turned to usefulness 269 

Acquisition, methods of 56 

Acorns as food 243 

Adding to what Nature volunteers 30 

Advance of ability reduces wages 230 

Administration and government 271 

Administration of future 267 

Administrative functions 271 

After wants are satisfied 263 

Agitator and fomenter 227 

[Agriculture 79 ; 244; 274 

Aim of the morgan 26 ; 30 

Aim of the state 35 

Air as property and value 12 

Air pressure 43 

Aldermen and industry 272 ; 273 

Amount of capital and profit 99 

Amount of property, fallacy of 17 

Appearance of exploiter 105 

Argument for wage system 55 

Argument of necessity of property 21 

Artificial restrictions to disappear 22 

Arbitrary evaluation 97 

Art production 80 

Average prices of food 250 

Authority from "above," and from the bottom 267 

Axe, machine and factory 87 ; 88 ; 90 ; 91 



ii INDEX 

PAGE. 

Back to the land 274 

Bad investments 101 

Bank check 209 

Bank appropriated 211 

Banks and clearing houses 206 

Banks, result of evolution 212 

Bank statements published 216-223 

Bank, exploitation by means of 225 

Bank investments 216 

Banking, clerical work '..... 212 

Baron, less of a pretender 104 

Barter 190 

Basis, for name of "capital" 7^ 

Beagles, hounds and retrievers 262 

Beating the worker down 142 

Benefit of improvement 137 

Bookkeeping waste 275 

Brains for hire 264 

Brains for useful work 264 

"Brain work" of bankers 213 

Brass buttons and brag 48 

Breaking up of gentile society 25 

British Board of Trade 256 

Buttressing morganism 35 

Building a house "^8 

"Buying labor" 26 ; 151 

Buying a livelihood 1*^9 

Capital and profit 99-103 

Capital, definition of 50 ; 55 

"Capital" name unjustified 52 

Callouses on minds 261-262 

Certificates of conviction 228 

Chemist without means 46 

Change of environment 43 



INDEX 111 

PAGE. 

Charity enslaving the mind 3^9 

Changing form of value '^5 

Cheap premiums in charity 239 

Checks on banks, how charged 206 

Cheat, the, outside of his game 231 

Child labor 107 

Children, efficiency of 235 

Church keeping gentiles ignorant 157 

Clearing house, process 206 

Co-ordination 273 

Contract, assumption false 147 ; 153 

Comparison of wages 248-251 

Competent will manage 273 

Coal mines as private property 14-15 

Coal at bottom of ocean 61 

Coming of private property, the 25 

Commingling of roles and characters 6 

Commodities serving as money 201 

Comptroller of currency, reports of 208 

Confidence in money 200 

Confidence in commodities 200 

Confession of inferiority 229 

Conflicting interests • . 6 

Confusion as to point of filching 124 

Confusion of percentages 255 

Confiscation or compensation 276 

Contractor's rings, no more 272 

Control of surplus 70 

Cost of living and wages 124; 143; 247 

Creating values 83 

Crowded cities • 274 

Countervailing interests, no more 265 

Cultivating fields 68 

Currency legislation 224 



IV INDEX 

PAGE. 

Darkening things that are clear 5 

Dead limbs on trees ^63 

Description of future society. 26Q 

Dethrone the morgan 267 

Differences easily eliminated 21 ; 22 

Dictating terms of life 70 

Diminution of productive workers 30 

Dinner, preparing 87 

Disease promotive of education 23 

Distributors 273 

^'Divine laws", purpose of 39 

Division of the firewood 85 

Dole of wages 71 

Dominion of man over matter 12 

Double standard of value 173 

Dominating industry and race 264 

Educated to secure the morgan 46 ; 80 

Effect of coercion on contract 148 

Effect of increase of output 230 

Efficiency engineers 230 ; 232 

Enjoyment of nature's bounties 20 

Enormous profits eliminated 265 

Enslaved minds 159 

Equal access to nature's resources 25 

Erroneous claim of perpetuity 13 

Eissence of ownership 11 

Evaluation, guesswork 58 

Evolution in exchange 204 

Every economy inures to benefit of morgan 230 

Exchange of value, made by man 57 

"Exchange value" and "use value" 55 

Exclusion, essence of property 13 

Expropriated gentile 25 



INDEX y 

PAGE. 

Exploiter, the 30 

Exploitation occurs in production 144 

Expression, of total value 120 

Extending the morgan's power 71 

Elxtent of property, fallacy of 16 

Factory cannot be owned 263 

Factory method 107 ; 111 

Factory price and retail price 116 

Failure to pay for gravitation 15 

Fake dogmas 48 

Fallacies of claim of property 16 

False pretensions of capital 82 

Female labor 107 

''Fetch and carry" 50 

Fiction of capital 82 

Fish, uncaught, not value 64 

First order of gentiles ^8 

Fixed incomes and wages 237 

Food as property 12 

Foreign markets 116 

Forester, the, at work 263 

Free goods of nature 14 ; 269 

"Free" workers and slaves 162 

Freight boat, capital 54 

Gambler's ethics in charity 229 

Gentile society, when broken up 25 

Gentiles all of one class 27 

Gentiles, second and third order 47 

Gentile self preservation 227 

General result, the, inevitable 267 

Getting husbands 275 

Getting the jimmy 109 



VI INDEX 

PAGE. 

"Getting more", a delusion 169 

Getting the means of living 179 

Getting rid of the morgan 276 

Giving fish to my companion 65 

"Giving gentile chance to live" 228 

Gold as money 194-198 

Gold displaced by paper 199 

Goods, commodities and money 191 

Government and administration 271 

Government, disappearance of 271 

Gravitation, value imparted to 64 

Great fortunes without attraction 268 

Grouping the members of society 7 

Growth of exploitation 107 

Guises of expropriator 25 ; 26 

Handicraft production 105 

Heaping up the surplus 114 

Hideous features created by the morgan 22 

Higher intelligence must result 267 

Hollow victories 174 

Hope-inspiring promises 230 

Hopelessness 182 

Horse, when "capital" 54 

Horseman without a horse 45 

How to throw off the rule 263 

Human efifort produces value 62 

Hungry rats 184 

Hunter, the, that kills the deer 68 

Hunting dogs 262 

"If I were a multi-millionaire" 267 

Illiteracy, effect of on wages 164 

Improvements in food stuffs 244 



INDEX Vll 

PAGE. 

Incentive of personal participation 274 

Increase of capital, table of 101 

Indolent minds easily satisfied 176 

"Ingratitude" in gentile hearts 228 

Intellectual mercenaries 34; 48 

Inventor's disadvantage 4:5 

Jefferson's ideal government 272 

Justice 1^*^ 

Keeping gentile mind confused 21 

Kent on property 19 

Labor, all there is of value 65 

Labor expended on the free goods 70 

Labor legislation 167 

Labor not bought 151 

Labor time 138 

Labyrinth of business 144 

"Law" of supply and demand 176 

Law, votaries of 35-36 

Lawless minds ^^'^ 

Laws, fewer and simpler 274 

"Lazy men" ^^0 

Led into the jungle 39 

Legal tender 192 

"Legitimate profits" 9S 

"Line of credit" at bank 213 

Living basis under change 275 

"Loans" included in deposits 213 ; 217 

Lure to acquisition, no more 268 

Machine domination ^67 

Machine production 107 ; 111 



Vlli INDEX 

PAGE. 

Man's rights without work 269 

Managing without the morgan 264 

Many denied the pleasure of work 270 

Marrying '^right" 275 

Marital relations, how affected 275 

^'Marginal" utilities 56 

Maritime liens 89 

Market not to be owned 268 

Marx on nature of value 56 

Mask crude and absurd 73 

Maximum of audacity 96 

Meager portion of the worker 76 

Measure of value QQ 

Measurements of qualities 57 

Measure of exploitation 120 

Mental limitations 43 

Mercenary forces 29 

Merchant, a producer 81 ; 109 

Method and sequence of labor 83 

Middle classes as buffers 261 

Mill on * Value" as a term 57 

Mill, in his preliminary remarks 5 

Military in service of the morgan 36 

Minds calloused 261; 262 

Mine owner 15 

Mobilizing bank assets 224 

Money, a means of confusion 123 ; 150 ; 190 

Money, a medium of exchange 190 

Money, a means of admeasuring value 122; 208 

Money a legal tender 196 

Money considered useless 275 

Money expression of value measurements 122 

Money, first goods, then commodity 190 

Money, five qualities and functions of 192 



INDEX IX 

PAGE. 

Money, instability in value of 197 

Money in the future state S75 

Money, meaning of to the worker 172 

Money of the temple of moneta 195 

Money will be of little use, when 276 

Morgan an obstruction 50 ; 264 

"Morgan," meaning and derivation 7 

Morgan class ^7 

Morgan as consumer 31 

Morgan as a "brain worker" 104 

Morgan, Lewis H., on property ^4 

Morgan is not owner 127 

Morgan's idea of his profits 126 

Morgan's power to extract tribute 67 

Morgan's possessions 92 

Morgan produces nothing » 105 

Morgan's precepts of right and wrong 95 

Morgan's reign must cease 267 

Morgan stupidity 262 

Motives that actuate man 5 

Movables of rare quality ^^ 

Mufti, the, of reform 2^9 

Names of "capital" 98 

Name of money does not value 197 

Names to distinguish 51 

Nature denies property rights 11 

Natural inclination to work 270 

''Natural lawlessness" 271 

National banks at a disadvantage 223 

Need gives a temporary dominion 12-13 

Negro, the, and the Indian 182 

Nests without renting or buying 269 

New names for old things 73 



X INDEX 

PAGE. 

New Satan 228 

New York courts on property 19 

Nitrogen in the air and in food 14 

Object of morgan's being , 48 

Obligation to ''pay" wages 149 

Offsetting compensation by taxation 276 

Only producers and users can own 128 

Opinion only basis of value, now 58 

Opportunity for useful occupation 265 

Orchard, when set out not foretold 266 

Our common inheritance 156 ; 269 

Overlapping of interests 6 

Ownership of nature's storehouse, effect of 94 

Owner of means owns ends 46 

Owning what our ancestors produced 44 

Owning the air 20 

Owning the ocean 13 

Oiwning things for use 268 

Ox, the, improvement of, not foretold 266 

Panama canal 273 

Paper money giving way 204 

Paying for coal 14 

Paying for air 62 

Paying the fiddler 96 

Pensioners, trials of 237 

Perform according to ability 269 

Personality of no consequence 261 

Personal servants 28 

Perversity of human nature 271 

Philosopher's stone 76 

Pianos and pictures l65 

Pig, improvement of, not foretold 266 



INDEX XI 

PAGE. 

Pig-iron handlers ^^^ 

Plague of human race ^^ 

Playing against cheat's game ^31 

Poker as a club 1^^ 

Politician to disappear ^'^^ 

Portrait of man to be ^^^ 

Power of being boss "^l 

Power of the state maintains property 11 

Preaching competition 4:8 

Pressure from both sides ^^1 

Part owner, incentive of ^"^4 

Passing value from axe to wood 88 

Pressing workers beneath the line ^30 

Preventing the recurrence ^^"^ 

Primal interests of the morgan 31 

Prices paid workers compared 140 

Principles of scientific management 233 

Prisoner in cell 1^^ 

Prisoner's allowance, and wages 155 ; 159 

Private owners of land ^^'^ 

Private ownership, government of 2'<'1 

Private profit, private property ^^^^ 

Prize-package game ^33 

Process of barter 1^3 

Process of producing value, beginning of 120 

Profits determine "value" of capital 99 

Profit from labor of gentiles, the morgan's 26 

Property of the morgan "^1 

Property, what is ? H 

Protection at low cost 22y 

Pujo committee report ^^"^ 

Purchasing power depressed 1^1 

Purpose of domination • • • • '^5 

Purpose of evaluation ^^ 



Xll INDEX 

PAGE. 

Purpose of supply and demand "law" 185 

Purposeful effort, pleasureable 270 

Railroad workers, wages of 249 

Raising false hopes 232 

Raising valuation 103 

Raising wages 241 

Rating of profits 103 

Rations of slave, capital 54 

Ravage-resisting gentiles 261 

Real wages 252-260 

Reasoning in a circle 100 

Receive according to needs 269 

Reform mufti 229 

Removing obstructions 263 

Rendering things dark and muddy 53 

Report of British Board of Trade 256 

Reputation of philanthropist 229 

Result of no private ownership 267 

Responsibility for *'law" of supply and demand 187 

Restraining influence, none on morgan 41 

Returns of gentiles of second order 32 

Revulsion against *'law" of supply and demand.... 177 

Righteousness 157 

Rights of human beings 270 

Right to own things 268 

"Rights" of property 11 

Right to have without work .' 269 

Right to work 272 

Rip Van Winkles 270 

Rise in prices of necessities 132 

Robin goes to market 269 

Sabotage of the morgan 93 



INDEX Xlll 

PAGE. 

Salesman's efficiency and pay 238 

Saloon, attractions of 165 

Satan of old, no longer 228 ; 229 

Saving inures to benefit of morgan 230 

School houses, effect of, on wages, 165 

Sciences of the ages 156 

Scientific administration 267 

Scientific standard, of value 170 

Second order of gentile 29 ; 31 

Seizure of religion by the morgan 39 

Self-preservation 180 

Self-serving deals 272 

Selecting a spouse , 275 

Selling price, measure of value 139 

Serf and baron 37 

Serf as producer 104 

Service, only, can be owned 11-12 

Setting hen and strange chicks 74 

Setting out an orchard 266 

Sewing machines . . o 243 

Shad, when they were cheap 245 

Shave, the, of the barber 60 

Shop-keepers' minds 262 

Sharing nature's free goods 274 

Shorter working days 245 

Shoveling, under stop-watches 233 

Shutting us off 15, 71 

Sick slaves 161 

Silver as money 194 

Simple administration 273 

Simple laws ^4 

Skilled and unskilled labor 138 

Slaves under the morgan system 261 

Sloughing off the dead limbs 263-264 



XIV INDEX 

PAGE. 

Slow freight and fast mail 56 

Small amount of money used 207 

Social position, marriage for 275 

Society of future 266 

Society about kinship 25 

Sorry controversies of gentiles 38 

Speeding up the machine 137 ; 235 

Spirit of rebellion 228 

Stage money 277 

State, functions of the 271 

Statesmen no longer controlling jobs 272 

State, the, sustains the morgan 157 

Steady employment, steady drudgery 271 

Stream carrying the load 80 

Stratagem of politicians 267 

Stop-watch work 233 

Street gamin's idea of money 198 

State, the morgan's 35 

Steam power, ownership of 45 

Strangling a baby 185 

Stork's banquet, the wolf at 46 ; 184 

Stone walls not necessary 158 

Strong governments 37 

Strongest not strong enough 97 

Struggle of the gentiles against morgan 48 

Stupidity of the morgan 263 

Sun's heat 15 

Supplementing nature 79 

Superior brains sloughed off 273 

Supply and demand 176 ; 182 

Surplus value 70 

Surpus value, formerly small 106 

Survival of the fittest 110 

Swapping of values 207 



INDEX XV 

PAGE. 

Table of growth of efficiency 112 

Talent devoted to the morgan , 35 ; 40 

Tangled skein of business 267 

Taxes, how collected 195 

Taylor's efficiency fallacies 233 

Tearing down curtains 73 

Tearing away the barriers 265 

Temporary dominion of man 11 

Tender conscience ..'.... 157 

Three orders of gentiles .27 

There can be no peace 277 

Third order of gentiles 34 ; 41 

"Thou shalt not covet" 38 

Thorns in the living flesh 264 

Throw off the morgan's rule 263 

Toll-gate keeper 149 

Toothless worms 227 

Transmission of value in production 83 

Transporter a producer 81 

Treasures of the ages 44 

Tree choppers, the 83 ; 87 

Tribute-taking morgan an incumbrance 263 

Trick of sticking on new names 74 

Trolley cars 245 

True value 123 

Trusting the banks 210 

Turgot, on those who darken 5 

Turning off the switch 15 ; 71 

Two methods of computation 143 

Understanding of principal terms 55 

Unnecessary differences • ^1 

Uninfluential stockholders 47 

"Use," meaning of in production. 70 



XVI INDEX 

PAGE. 

Used value in production 82 

Use for maintenance only 11 ; 12 

''Use value" and "exchange value" 55 

Usufruct, all that man can own 11 ; 12 

Value, discussed and defined 55-69 

Value applied in production 82-92 

Value at factory and at retailers 125 

Value, called capital 70 

Value expressed in money 138 

Value in satisfying human wants 70 

Value in things in themselves 61 

Venison a vehicle to convey value 68 

Vested interests, no more 272 

Violating "divine" laws 40 

Volume of property, fallacy of 17 

Wages of the average worker 246 

Wages and food prices 251 

Wages and living, in Great Britain 256-260 

Wages actually reduced, average 252 

Wage earner managing with less 252 

Wages carried to retail store 130 

Wages gravitate to one point 160 

Wages, not received for labor 148-150 

"Wages", the term confusing 147 

Wages, part of value produced 75 

Wages, variance of 165 

Wall, building a 88 

Wars, cause of will disappear 272 

War power sustains property 18 

Wastefulness in buying 140 

Water as property 12 

Water necessary, yet not value 61; 64 



INDEX XVU 

PAGE, 

Watt could not have foretold 266 

Weeding out process 234-235 

Why not work for ourselves? 265 

Wine in the morgan's cask 46 

Without tangible cannot own intangible 45 

Wife, the hunt for a 2*^5 

"Winning more", a delusion 174 

Wolf, the, at the stork's banquet 46 : 184 

Women selecting husbands 275 

Wood choppers, the 83-87 

Work day shorter 245 

Worker buys his living with labor 121 ; 142 

Worker is exploited in production 122 

Worker receiving less value 242 

Woven fabrics, clothing of 243 



